Intuit Inc., the maker of the TurboTax tax filing software, is being charged with deceiving consumers with bogus advertisements pitching “free” tax filing that millions of consumers can’t use. The Federal Trade Commission also filed a federal district court lawsuit asking a court to order Intuit to halt its deceptive advertising immediately since consumers are rushing to file their taxes and could be harmed.
Most tax filers can’t use the company’s “free” service because it isn’t available to millions of taxpayers, such as those who get a 1099 form for work in the gig economy, or those who earn farm income. In 2020, for example, about two-thirds of tax filers couldn’t use TurboTax’s free product.
“TurboTax is bombarding consumers with ads for ‘free’ tax filing services, and then hitting them with charges when it’s time to file,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season.”
Intuit’s years-long marketing campaign centered on the promise of “free” services and ads have run during major events, including the Super Bowl and this year’s NCAA Basketball Tournament:
In spite of this advertising, many consumers who took the time to gather their documents, entrust their personal information to Intuit, and begin the filing process found that they couldn’t file their taxes for free, Levine said.
In at least one ad ,a disclaimer appeared on the screen while an announcer said, “That’s right, TurboTax Free is free. Free, free free free.”
This year, consumers whose adjusted gross income is $73,000 or less can use products in the IRS Free File Program, which are offered by several different companies, to file their federal tax return. In some cases, state tax return can be filed for free, too. More information about the Free File Program is available at irs.gov/freefile.