This includes claiming that TurboTax is free. Then they steer them towards paid services and products.
Intuit is being sued by the U.S. government. They claim that TurboTax, the tax filing software TurboTax, is owned by someone who lies to customers. This includes claiming that TurboTax is free. Then they steer them towards paid services and products.
FTC stated in court papers that TurboTax was only available for certain users based on their tax forms. Intuit informs many others that after they have spent time gathering their financial and personal information and TurboTax has prepared their tax returns, they can no longer use TurboTax for free. They will have to pay a fee to continue their taxes.
The FTC cited TurboTax's use of a questionnaire to encourage users to purchase software upgrades to help them file taxes.
TurboTax provided a completely free option through its Free File program. It was run in partnership with IRS until 2021. The FTC stated that the software manufacturer continued to steer taxpayers eligible for Free File into paying upgrades. According to the government, Intuit used code to conceal its Free File software from search engines between November 2018 and April 2019.
People searching for tax filing information for free were, allegedly, redirected to TurboTax's premium version. In 2021, TurboTax discontinued offering a free file option.
On Monday, Intuit responded to the FTC's complaint by saying that it would "vigorously contest" the suit.
Kerry McLean, Intuit’s general counsel, stated in a company blog, "We are not steering taxpayers away form free tax preparation options. Our free advertising campaigns have led more Americans to file their taxes for no cost than ever before and have been key to raising awareness about free tax prep."
McLean stated that TurboTax was used by more than 100 million people over the last eight years, with 17 million Americans filing their taxes for free in 2021.
He stated that he was a long-standing advocate for tax simplification, taxpayer access to free tax preparation and tax simplification.
Intuit also stated in court filings it will stop airing its "free, no, and free" ads for the remainder tax season. The company stated that no ads would be shown after Friday.
Intuit is not the only one to be sued. Intuit was sued by the city of Los Angeles, and Santa Clara County in 2019 after an investigation by ProPublica. The software company was accused of defrauding customers. The company has also been sued by consumers in class-action lawsuits and in private arbitration.
In the early 2000s, the Free File program was created as a public-private partnership. It allowed Americans with less than $73,000 per annum to file their tax returns free of charge.
The program is far from meeting its goals. Only 3% of taxpayers eligible to file free in 2019 were actually able to do so, according to a Treasury report . Many more could have paid for the privilege. H&R Block and TurboTax, two of the most popular tax software providers in recent years, have both left this program.