Intuit backtracks on new TurboTax fees

In response to a customer revolt on the Internet, Intuit has decided to eliminate fees it introduced with TurboTax 2008 that would charge users for preparing multiple returns.

The maker of the popular tax-preparation program announced Thursday that it would drop the $9.95 fee it introduced with this year's release, while still maintaining free e-filing for its customers.

"We're responding to changing market conditions and customer feedback," Dan Maurer, general manager of Intuit's consumer division, said in a statement. "We believe this better positions TurboTax in the marketplace with an even stronger value proposition for consumers."

The reversal comes as the software maker grappled with an Internet protest from longtime customers that included an overwhelmingly subpar rating by Amazon.com reviewers, as well as a bevy of negative comments on Intuit's own user message boards. Many users, who said they also prepare returns for elderly parents and young children, complained that the new fees would double the cost of using the software compared with last year.

Many Amazon reviewers used the online retailer's feedback section to vent their frustration, with some users calling the new fees a "scam" and "unjustifiable and unsubstantiated."

The avalanche of outrage is reminiscent of the well-publicized and coordinated user revolt against the digital rights management restrictions on Electronic Arts' game Spore, which resulted in more than 2,000 one-star ratings being left on the game's Amazon page.

Company representatives defended the new charges to me a few days ago, saying that users would actually save money because e-filing was included in this year's version.

Many readers responded that they were so upset by the new fee that they would not be purchasing the product this year, but it's unclear whether this reversal will lure back users who defected.