Intuit locks down TurboTax

To cut down on unlicensed use of the tax software, the financial software and services company will add product activation technology.

David Becker
David Becker Staff Writer, CNET News.com
David Becker
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Financial software and services company Intuit announced Thursday that it will add product activation technology to its TurboTax products to cut down on unlicensed use of the software.

Product activation, most notably used in Microsoft's new Windows XP operating system, locks a copy of a software program to a specific PC.

With Intuit's version, customers installing any federal version of TurboTax starting this year will need to obtain an activation number from Intuit, either by the Internet or phone. The activation number is tied to the product "key" for that particular copy of TurboTax. Anybody who tries to activate the software using that product key after it has already been activated will be refused and invited to purchase a valid license.

Intuit spokesman Scott Gulbransen said customers will still be able to prepare multiple returns with a single copy of TurboTax installed on the same PC. He added that the activation technology doesn't collect any information on the customer or the PC TurboTax is installed on. "All this does is prevent you from passing along a disc umpteen times," he said.

Software makers are using increasingly sophisticated measures to prevent unauthorized duplication and multiple installations of their products. With the Windows XP activation process, the software collects information on the PC it is installed on to lock the software to that particular configuration.

Privacy advocates expressed concern about Microsoft's activation process, while customers balked at the extra expense to install Windows XP on multiple PCs in a single household.

TurboTax has been one of the most reliable segments of Intuit's business, with the company selling 5.5 million copies of boxed TurboTax products for the last tax season, a 5 percent increase from a year ago. Intuit has been trying to push customers to the online version of TurboTax, however, where users last year increased 85 percent, to 2.2 million. One of the advantages for Intuit of the online service is that customers can file only a single return per subscription fee.