From: "Rich Gauszka" 

EID paranoia or valid concern?

http://www.infoworld.com/articles/op/xml/00/03/20/000320opfoster.html

Many QuickBooks 2000 customers have been upset that they are now required
to subscribe to Intuit's $72 per year Basic Payroll service if they want to
use the program's payroll calculation feature to figure deductions.
Intuit's revised policy concerns them on several counts. Those upgrading
from previous versions often could not tell the policy had changed from the
somewhat cryptic notice on the package, and many said they might have
chosen not to upgrade had they realized they would have to pay extra for
the payroll feature. Of even greater concern is the amount of personal
information Intuit requires from payroll subscribers and the requirement
that they download new tax tables at least every 45 days.

"The latest version of QuickBooks Pro [2000] will not let you use the
payroll tax table calculation feature until you sign up online for a year's
subscription to [Intuit's] payroll service, at $72 per year," wrote
one reader. "Not only that, but you must log on at least every 45 days
and update it or it will cease to work. In addition, you have to give
[Intuit] (among other information) your Employer Identification Number ...
[previously] no private information was required."

For some time Intuit has charged a subscription fee to those who wanted to
receive tax table updates, but many chose to use the original tax tables
and then calculate their own changes. As we noted last year, Intuit made
this tactic more difficult with QuickBooks 99, zeroing out all manual
entries of deductions after each payroll if you had not downloaded the new
tax tables. Then, as now, Intuit's justification for forcing
non-subscribers to enter or re-enter deductions manually for each payroll
check they write has been to ensure that customers stay in compliance with
ever-changing federal and state payroll tax regulations, citing statistics
that 30 percent of small businesses are penalized each year for inaccurate
payroll filings.

This paternal concern for its customers might have more credibility if
Intuit were willing to take responsibility for inaccurate payroll filings
by a Basic Payroll subscriber due to an error in Intuit's tax table
updates. But it's no surprise that Intuit does not guarantee the accuracy
of its tax table updates.

"The tax tables are accurate to the best of our knowledge, but we
don't guarantee that for users of the Basic Payroll service," says
Jennifer Martin, marketing manager of QuickBooks payroll services.
"The Basic Payroll user is still responsible for checking that
information." Intuit will pay penalties for inaccurate filings on its
Deluxe Payroll service, according to Martin, as there Intuit actually
functions directly as a payroll service for the customer.

One has to suspect that Intuit's true motivation may have less to do with
making sure customers are in compliance and more to do with maximizing
Intuit's earnings. Even customers who willingly subscribed to the service
have had their suspicions raised by the personal information Intuit
requires them to provide. In particular, some readers were puzzled as to
why Intuit requires their EID (Employer Identification Number).

Accountants who use QuickBooks to do payroll for more than one client had
real concerns about the EID requirement. As the password a user receives to
access the tax table updates is tied to the EID, this means accountants
would have to purchase a separate subscription for each of their clients.
By the time I spoke to Intuit officials, however, they had already heard
enough protests from such customers that they had dropped the separate
subscription fee for multiple clients.

Although accountants don't have to pay for each subscription, they are
still required to provide the EID for each client. This leaves some feeling
uneasy, partly because they feel Intuit's Deluxe Payroll service is
targeted at small businesses of the same type as the accountants' clients,
so how can they be sure they aren't handing over their client list to a
competitor? Given Intuit's predilection to use every marketing angle it
can, that might not be total paranoia. But Martin and other Intuit
officials insist Intuit is using EID numbers only to provide a unique
identifier for each account, and they stated categorically that Intuit will
not use the EID numbers for marketing.

Although we can therefore have a reasonable hope that Intuit won't try to
steal its customers' clients, one never knows what scheme its marketing
troops might come up with next. When it comes to creative new ways to tap
its customers' wallets, Intuit is an innovator with few, if any, peers.

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