© tab62/Shutterstock.com

This could be a first. The entity catching the most flack this tax-filing season, which doesn’t even officially begin until Jan. 20, is not the Internal Revenue Service.

It is a tax preparation software company.

Intuit, the maker of the perennially popular TurboTax program used each year by millions of taxpayers to complete and e-file their federal and state tax returns, is on the consumer hot seat due to changes in the software.

Some filers who have previously relied on the company’s Deluxe version to fill out their returns have discovered that they must upgrade to get the same forms for their 2014 taxes. That means in some cases paying up to $40 more for product upgrades.

TurboTax’s Deluxe package no longer offers users step-by-step interview help in filling out Schedule C, used to report self-employment and small business income. Also missing are Schedule D for capital gains and Schedule E for rental and partnership income.

Worse, according the outpouring of unhappy TurboTax software users on Internet message boards, is that many taxpayers didn’t discover the omissions until they were well into their computer tax filing process. At that point, the choice was to start over with a new tax prep software program or pay for the upgrade to finish.

Business, not tax, reasons for changes

The reviews have been scathing, with many angry filers accusing Intuit of simply trying to extract more money from its client base.

Not true, says Intuit. The company says it never hid the changes, noting them before the start of the tax season on retail packaging, displays and websites. That’s a good lesson even in nontax times: Never assume. Always double check any product to make sure it’s what you want to buy.

As for the changes, Intuit says there are solid business reasons for them.

TurboTax’s use of simple questions about real-life situations to make the applicable federal tax code provisions more understandable is the product’s real value, says Intuit spokesperson Julie Miller. The changes to TurboTax desktop were already part of product’s online filing option. “As more customers move from TurboTax desktop to online to mobile solutions, this change creates a more consistent experience across TurboTax products and platforms,” says Miller.

That’s a valid business rationale, but not much help to folks who prefer to use the desktop version. Intuit is hoping to ease some of that anger with a benefit that comes with the product upgrades: no-cost access to CPAs and Enrolled Agents via phone and chat to discuss specific filing issues.

Software competitors pounce

Tax software competitors are hoping TurboTax’s amends and explanations aren’t enough. And one is doing more than just waiting for TurboTax users to switch.

H&R Block, the major player when it comes to in-person tax filing at its franchises across the country, is taking advantage of the TurboTax tempest to lure potential new users to its own computer filing software.

“If people are disappointed by their software choice this year, we encourage them to switch to H&R Block for free. Our software products offer the same tax form support and related features as last year and TurboTax users can easily import prior year data into H&R Block tax software,” says Jason Houseworth, president of digital products for H&R Block.

To claim the Block offer, taxpayers must email SwitchToBlock@hrblock.com and include their name, address, phone number, the type of operating system (Windows or Mac) and proof of TurboTax purchase. The proof can be a photo, scan of the store receipt or the email showing their download code. Block will then send the taxpayer an email for one free download of its federal and state filing product.

Will TurboTax changes hurt the company or push more people to its already growing online filing area? Will it get some new customers for H&R Block? The answers to all those questions are yes.

What about you? Which tax software program do you use? If it’s TurboTax, will you have to upgrade? Do you intend to? Or will you look to H&R Block or other tax software providers as an alternative?

More tax info from Bankrate

Want the latest news on taxes, money-saving tax tips, tax scams and myriad other tax matters? Subscribe to Bankrate’s free Weekly Tax Tip newsletter.

You also can follow me on Twitter: @taxtweet.

Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”

Promoted Stories