Intuit, the parent company of TurboTax, is still facing blowback over claims it tricked people into using its “free” tax filing service that wasn’t actually free. In a ruling on Friday, the Federal Trade Commission’s chief administrative law judge (ALJ) ruled that Intuit “deceived consumers” and “engaged in deceptive advertising.”
The ruling includes several pages of commercials and online ads where Intuit advertised its “Free Edition” software. While the name implies that the service is, well, free, people wound up having to pay to use it — sparking a lawsuit from the FTC and a $141 million payout to affected users. Meanwhile, Intuit’s actually no-cost Free File version, which it launched in partnership with the IRS, remained exceedingly difficult to find. In 2021, Intuit exited the program after the IRS stopped letting companies hide their free filing services from search engines.
The FTC’s ALJ determined that there is a “cognizant danger of a recurring violation” by Intuit and issued a cease-and-desist order that prohibits the company from “engaging in deceptive practices in the future.” The ruling prevents Intuit from representing a product as free unless it actually is free for everyone to use and “clearly and conspicuously discloses any terms that would limit the offer.”
In a response provided in advance of the FTC’s ruling, Intuit calls the agency’s investigation process “flawed and highly questionable,” noting “Intuit already adheres to most of the advertising practices in the FTC’s erroneous decision.” The company adds that it has “been clear, fair, and transparent” with customers and remains “committed to free tax preparation.”
Hopefully, we won’t need to rely on potentially deceptive third parties to file our taxes online going forward. The IRS is working on a government-backed free filing service that it will pilot during the 2024 tax season.