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As the opening of tax season approaches, the Federal Trade Commission has cracked down on “deceptive advertising” from Intuit, maker of tax filing software TurboTax.
The FTC on Monday upheld a September ruling that found Intuit violated federal law by marketing free TurboTax software to filers who were not eligible, and were upgraded to deluxe and premium products, according to the opinion.
The Commission’s final order bans Intuit from advertising “free” services unless all filers can use the free software or the company “clearly and conspicuously” discloses eligibility.
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“The FTC warns consumers that ‘free means free, not ‘free for a few’ or ‘free for some,'” said Ed Mierzwinski, consumer advocate at U.S. Public Interest Research Group. “I hope Intuit gets the clear message and passes it along to others in corporate America.”
In May 2022, Intuit entered a multistate agreement to pay $141 million to lower-income Americans who wrongly paid for using the “TurboTax Free Edition” of its software. The agreement affected 4.4 million customers and the settlement began in May 2023.
“Absolutely no one should be surprised that FTC Commissioners — employees of the FTC — ruled in favor of the FTC as they have done in every appeal for the last two decades,” Derrick Plummer, spokesperson for Intuit, said in a statement. “This decision is the result of a biased and broken system where the Commission serves as accuser, judge, jury, and then appellate judge all in the same case.”
“Intuit has appealed this deeply flawed decision, and we believe that when the matter ultimately returns to a neutral body Intuit will prevail,” he added.
The opinion comes as the IRS prepares to launch Direct File, the agency’s free electronic tax filing pilot program, which will allow certain taxpayers to file federal returns directly with the IRS. The limited pilot will roll out in phases in certain states, with wider availability expected by mid-March.