The Federal Trade Commission (FTC) said Tuesday that Intuit’s “ubiquitous” advertising claiming that TurboTax tax preparation software is free is misleading and has asked a federal court to order Intuit to “stop disseminating the misleading claim.” that consumers can file their taxes for free with TurboTax.”
According to the commission, the ads, “some of which consisted almost entirely of the repeatedly spoken word ‘free’,” fooled people into believing they could file their taxes with TurboTax for free. “In fact, most taxpayers cannot use the company’s ‘free’ service because it is not available to millions of taxpayers, such as ‘ the agency said in a press release. The FTC said that in 2020, “approximately two-thirds of taxpayers were unable to take advantage of TurboTax’s free product.”
The FTC is seeking an injunction that would prevent Intuit from engaging in “deceptive acts or practices” in its marketing and advertising, including ads for TurboTax.
Intuit said in a statement that it would “vigorously challenge” the FTC’s complaint, claiming the arguments lack credibility. “Far from discouraging taxpayers from free tax prep offers, our free advertising campaigns have resulted in more Americans filing their taxes for free than ever before and have been instrumental in raising awareness of free tax prep,” said executive vice president and General Counsel of Intuit Kerry McLean.
The IRS has a program that allows many Americans to file their taxes for free as part of a partnership with the nonprofit coalition Free File Alliance. However, Intuit said last July it was exiting that program, citing its “limitations.”
If all of this sounds a little familiar to readers, they might recall ProPublica’s 2019 report series that found that Intuit and H&R Block had tricked people into paying their taxes. ProPublica found that both companies prevented free versions of their software from showing up in search engine results, making it harder for customers to find them online. The IRS later amended the Free File program, removing a provision that prohibited the agency from creating its own online filing system that could compete with the software companies’ products.