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Brook Gladstone: The Washington Post reported this week that TurboTax and H&R Block have added AI chatbots to their tax prep software. The Post's tech columnist, Jeffrey Fowler, sat with two actual tax pros to test the chatbot's know-how. The results weren't so great. He says the bots flubbed more than half of the questions he fed them. Both companies have disclaimers underneath their chatbots. TurboTax says, "Intuit Assist is still developing and will improve with your help." H&R Block warned that "AI Tax Assist is a digital helper that's still learning, so please review all responses."

As Fowler cautioned, "When a product's fine print says, "Don't trust us,' you shouldn't." All of which is to say, it's tax time. Each year around this time, messages pop up in our Twitter feed referring to a story we did some years back on tax filing. It's become something of a PSA. Why? Because filing taxes is a fraught business. It makes sense we turn to companies like Intuit or H&R Block, who say they're more than ready to step in, save us money, and simplify our lives.

Speaker 2: Your life is busy, growing. We might say it has layers. That means tax complexity. We get it, and we're on it.

Jessica Huseman: [laughs] They do get how complex the tax system is because their business model is based on it staying that way.

Brook Gladstone: Jessica Huseman, editorial director of VoteBeat, says that in the face of our overwhelmingly complex tax system, firms like Intuit, which makes TurboTax, spend heaps of cash to ensure that it stays overwhelming. In 2023, Intuit spent nearly $3.8 million on lobbying, and H&R Block spent more than $3 million, and they're also spending money giving direct donations. When I spoke to Jessica a few years ago, I asked, "What's it like doing taxes right now?"

Jessica Huseman: I'll just tell you how I do my taxes, and maybe that will be representative because I don't think that I'm very good at it. I keep all of my documents in a pink shoebox, and I stuff them in there all year long. A couple of weeks before April 15th, I sign up for one of these paid tax services, and I meticulously go through all of my returns from the company that I work for, from any freelance work that I might have done. I take all of the receipts that I've also saved, I spread them all out over the floor.

I add those up, and I try to figure out which box I should type these numbers into. It takes hours, and in the entire time, I have this sick feeling in my stomach that I've lost a return, or maybe I'm being too generous with how much I've spent on my business all year long, and then I hit send and hope for the best. It could be so much easier than that.

Brook Gladstone: How could it be better?

Jessica Huseman: Think about all the things the IRS already knows about you. Your bank is already giving them information as to how much money you have and where that money is coming from. Your employer is also giving them information as to how much they are paying you. In a lot of European countries, tax authorities use that information that they already have and send you a slip saying, "This is how much we think that you owe." You can either say, "Yes, that's correct," sign it off, send a check back with it, or you can use your own tax preparation service to do your taxes yourself.

Brook Gladstone: If they say, "You owe us $3,000," and you say, "Wait a minute, I have spent more on my business beyond the standard deduction." You can just add that additional information to their pre-filled-out return.

Jessica Huseman: Right. The only thing that this return-free system would do would be the IRS telling you everything it already knows about you and making a best estimate as to how much it thinks that you owe. It would be great if I knew what the IRS knew about me. There's a lot of power in that. A lot of people might, in fact, be able to take advantage of such a system. If the IRS isn't aware of some income that you might have, maybe you just don't say anything, right?

Brook Gladstone: Not that you're advocating this.

Jessica Huseman: Not that I'm advocating this. Everybody should file their taxes.

Brook Gladstone: If it's so simple for most of us, why do we turn to companies like H&R Block?

Jessica Huseman: Because the federal government is presently barred from offering its own system like that. They have signed a contract with the Free File Alliance. The Free File Alliance is a group of 13 private for-profit tax preparation companies to provide the majority of Americans with a free system of doing their taxes. Free filing is supposed to be available to 70% of the tax-paying public. In exchange for these companies offering a free product, the government says, "All right, we will not offer a free product ourselves."

The problem is that nobody knows that this system exists because the IRS's budget for marketing this system is zero dollars, and the tax preparation companies have no incentive for you to use their free products instead of their paid-for products. Last year, less than 2% of the people who paid taxes did so through the free file system, even though it's supposed to be available to 70% of the tax-paying public.

Brook Gladstone: Intuit has been quite frank in its quarterly statements by saying, "We don't want this pre-fill system because it'll hurt our bottom line." That's not in their commercials.

Jessica Huseman: No, it's not in their commercials. They, in fact, are for things that would make the existing system easier for you, less boxes for you to fill out. They do lobby for bills that would simplify the tax system in that way but the ultimate way that they could make the tax system easy is if the government were to offer a system of return-free filing, which they are inherently opposed to.

Brook Gladstone: There have been bills on both sides of this issue. Where do they stand now and what do you think is likely to happen?

Jessica Huseman: Last year in April, there were two bills that were proposed within days of each other. One in the Senate, some Democrats sponsored a bill that would have created the system of return-free filing to simplify your taxes. In the House, a bipartisan bill would make permanent the system of Free File Alliance. Both of those bills died in committee. The Free File Alliance agreement expires in 2020 and so before then, we would either have to renew that agreement, make it permanent, or replace it entirely with this system of return-free filing.

Brook Gladstone: You've mentioned that anti-tax libertarians like Grover Norquist side with the tax prep companies. It would seem to me that simplifying filling out your taxes would be at least theoretically more up his alley.

Jessica Huseman: Right. When folks like Grover Norquist talk about this system, their talking point and the talking point that the Free File Alliance uses is that it is an inherent conflict of interest for the person you are paying your taxes to, to also tell you how much you owe. That it wouldn't be in the IRS's interest to offer up all of the deductions that you might qualify for. They might exaggerate how much you owe.

Brook Gladstone: I think part of the problem is that most people think you can't fight the IRS.

Jessica Huseman: Right, but there are a couple of problems with that argument. First and most obviously, they leave out the fact that it is an entirely voluntary system. You get to tell them if you disagree with that number. Then also, I think something that gets left out of this conversation is that there are hundreds of thousands of people every year that don't file their taxes at all and thus don't qualify to get a return. The IRS has hundreds of millions of dollars that are unclaimed from people who didn't file their taxes and thus paid too much.

They could get money back, but they just never filed their taxes to begin with.

Brook Gladstone: When you hear ads from tax prep companies, like the one we played at the top of the interview, can you imagine an alternate text that would be closer to the truth?

Jessica Huseman: It would be great if their commercial said something like, "We're for making your taxes easier as long as we have to do them for you." [laughter] It boggles the mind. What they're actually advocating is that they want to make their software simpler to use. They want you to be less annoyed when you're using their software but what they don't want to happen is a system that's so simple that you don't need their tax software at all. They want to simplify it, but not too much. Your taxes could take minutes to do instead of days or hours, and they want to keep it at hours instead of minutes.

Brook Gladstone: Thank you so much, Jessica.

Jessica Huseman: Yes, no problem.

Brook Gladstone: Jessica Huseman is a reporting fellow at ProPublica.

Speaker 4: You're busy, friends, family, kids. No wonder you don't have time to do your taxes. That's why we at EasyTax are committed to making your filing experience easier. Not very much easier, just a little bit easier. Like still bad, but maybe 10% less bad. Imagine if the government just told you how much they thought you owed as a starting point. Imagine if the government even told you if they owed you money without you even having to file. Or, better still, imagine the exact same system we already have, but with a new app, so you can take your stress anywhere.

At EasyTax, we offer the best service possible, while also ensuring that you remain entirely dependent on us and our product. Is it the best system? Of course not, but it could be worse. You could be dead. EasyTax, making your life slightly better within limits.

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Brook Gladstone: Jessica Huseman is a journalist and the editorial director of Votebeat. Hope you'll join us on Friday for the big show. I'm Brook Gladstone.

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