A new "product activation" system in many 2003 editions of Intuit Inc.'s TurboTax software has upset users of the popular tax-preparation program.
To prevent people from lending their TurboTax CD-ROM to others after they've filed their returns, Mountain View, Calif.-based Intuit added "SafeCast" software to lock each copy of TurboTax to one computer. Anyone trying to use that copy elsewhere will find that it runs only in "trial" mode, with printing and electronic filing disabled.
Participants in online discussion groups are bashing Intuit for sneaking "spyware" into its trusted program. A typical message at Amazon.com: "Avoid this software like the plague!"
Specific complaints center on the TurboTax installer not disclosing that it is adding SafeCast software on the side, and that the extra code isn't removed by TurboTax's uninstaller.
Michael Block, a certified public accountant in Fort Lauderdale, Fla., was so irritated, he recommended that his clients use other tax-preparation programs.
"I don't mind that they're trying to combat theft," Block said. "But we trust them with our income tax data, and they should've trusted us to tell us what this copy protection did."
Jeff Bernstein, a telecommunications analyst in Washington, said the issue was enough to make him switch to H&R Block Inc.'s software, TaxCut, this year. "It may be that this is nothing, but it was enough of a question in my mind that I decided to use a different product," Bernstein said.
Users also don't like the fact that they can't move a lawfully purchased copy of TurboTax to a new computer without calling Intuit for permission.
Intuit said the product-activation system (not included in Mac OS and Spanish-language releases of TurboTax) was necessary to protect its business. The company said 15 million people filed their returns electronically last year using a TurboTax product, but only about 8 million people bought the desktop product or signed up for Intuit's Web tax-filing service. The number does not include people who filed returns printed by the program.
SafeCast developer Macrovision Corp. said its software shouldn't affect everyday computing. Product manager Michael Glass said SafeCast only gives the user's computer a key to make TurboTax work. "We're absolutely not pushing spyware or hidden software on people," he said. "It's simply a licensing mechanism for the software."
Scott Gulbransen, a spokesman for Intuit, said most of the outrage is because of misunderstanding of how product activation works or philosophical disagreements over the company's right to protect its products.
"There's going to be a certain percentage of people who are opposed to any type of digital rights management," he said. "We're doing our best to try and convince them otherwise, and hopefully we'll change their minds."
Microsoft Corp. uses a similar product-activation scheme for Office XP, Windows XP and the recently shipped Plus Digital Media Edition add-on.
Intuit has retreated in some ways since TurboTax's first release in December. It posted a new uninstaller (www.turbotaxsupport.com) that will remove SafeCast and announced that it will stop enforcing product activation for this year's edition after October, so users whose 2002 tax returns are audited will be able to use TurboTax on whatever computer is convenient.
The controversy has not has bumped TurboTax from its No. 1 sales ranking. The regular and deluxe versions have been the two best-selling programs in the United States since the beginning of December, according to the research firm NPD Group.
Jupiter Research financial analyst Robert Sterling predicted that the fuss wouldn't make a dent in Intuit's business: "I don't think it's going to affect sales at all."
Gulbransen, in turn, said that while the company will fine-tune its implementation to reassure anxious users, that's as far as it goes. "Are we going to get rid of product activation? No."