FTC Sues Intuit For Marketing Tax-filing Software TurboTax As 'free'

(RTTNews) - The Federal Trade Commission has sued Intuit Inc., the maker of the popular TurboTax tax filing software, claiming that the company has deceived consumers by marketing the software as "free" but charging them when they use it to file taxes.

The Commission has also filed a federal district court complaint asking a court to order Intuit to halt its deceptive advertising immediately.

The Commission alleges that the company's advertisements touts that their products are "free", which mislead consumers into believing that they can file their taxes for free with TurboTax. In fact, most tax filers can't use the company's "free" service because it is not 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.

Around 56 million people filed their taxes with TurboTax in 2021, according to an Inuit shareholder presentation in January. Those individuals filed 54 million W-2 and 40 million 1099 tax forms, the company said.

"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 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."