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Intuit offers TurboTax tests, apologies

The software maker acknowledges that it made mistakes with controversial new antipiracy technology, but says independent tests show many concerns are unfounded.

The head of Intuit's tax software division acknowledges that the company made mistakes with controversial new antipiracy technology but says independent tests show that many concerns are unfounded.

Inuit plans later this week to publish on its Web site results of tests from , an independent laboratory Intuit hired to investigate consumer complaints about product activation technology included in current versions of TurboTax, the company's market-leading tax software.

"We thought it was important to get some independent answers on some of these concerns," Tom Allanson, senior vice president of Intuit's TurboTax Division, told CNET News.com. "There's a lot of noise out there--we want people to be able to come to one place and get the facts and make up their own minds."

The product activation code, based on SafeCast software from Macrovision, locks each copy of TurboTax to a single PC. Customers can install the software on other PCs but can only print or file a return from the computer the software was installed on.

Customers have complained in online discussion groups, shopping sites and other forums that SafeCast runs continually in the background on computers with Microsoft's Windows XP operating system, even when TurboTax isn't running, thus consuming memory and other resources. The PCTest results show that SafeCast consumes less than 1MB of memory on a typical Windows XP machine, according to Intuit.

"In all the test systems they set up, they didn't find any appreciable deterioration in performance for any of the computer systems they tested," Allanson said.

Complaints have also targeted SafeCast's mechanism of storing its activation code on an unused portion of the PC hard drive--known as track zero--where it can't be viewed or altered by the customer.

Allanson said that although neither of those mechanisms should be a problem for consumers, Intuit will remove them in next year's version of TurboTax.

"We're probably going to go with a much different strategy next year--it will not be memory-resident; it won't have any of the writing to track zero problem," he said. "We did it that way because we don't want to eat up disk space, and we wanted to make it easier if people had to restore from a backup. But when you write to an area of the disk that's not ordinarily used, people think you're trying to hide something. I can understand why people would be concerned about it."

Other complaints have been based more on misinformation, said Allanson. The PCTest results show SafeCast has no impact on the use of recordable media drives, despite allegations that the software disables some CD-rewritable drives. Those complaints apparently stemmed from confusion with other Macrovision products aimed at preventing copying of software disks.

The PCTest results also show that SafeCast does not collect or transmit any information on the PC it's installed on, contrary to frequent mischaracterizations of the program as "spyware."

"The primary thing that concerned us was this notion of spyware, the idea that we were collecting and transmitting information," Allanson said. "When we went to this particular orientation of the Macrovision product, we wanted to be very clear we weren't collecting any information on the customer or their PC or what they do with it."

Allanson acknowledged that customer support surrounding activation issues was spotty during the first month or so after TurboTax went on sale, with some customers receiving conflicting or erroneous information on common issues such as installing TurboTax on a new hard drive.

"Early on, there was some confusion," he said. "It was a small percentage of customers who got bad information early in the process."

Allanson said Intuit is still committed to stemming the significant losses it suffers because of "pass-along piracy"--when customers share a TurboTax CD with friends and family.

"I think we might have missed the general goal by upsetting the number of customers we upset--we certainly missed the mark on that one," he said. "We've learned a lot, and were going to do it differently next year.

"We've got well over 3 1/2 million people who have activated the product through the server and never had a problem. But I am very sorry for the customers who have been impacted."

Intuit executives said during the company's second-quarter earnings call earlier this month that the TurboTax flap has had a negligible effect on the company's business. The latest software sales reports from market researcher NPD Group still show Inuit on top, with versions of TurboTax accounting for the top three retail software packages during the first week of February, followed by three versions of H&R Block's competing TaxCut products.