FTC Issues Opinion Finding that TurboTax Maker Intuit Inc. Engaged in Deceptive Practices (2024)

FAQs

FTC Issues Opinion Finding that TurboTax Maker Intuit Inc. Engaged in Deceptive Practices? ›

The Federal Trade Commission has issued an Opinion and Final Order that Intuit Inc., the maker of the popular TurboTax tax filing software, engaged in deceptive advertising in violation of the FTC Act and deceived consumers when it ran ads for “free” tax products and services for which many consumers were ineligible.

The FTC issued a Complaint against Intuit in March 2022, due to the prominent “free” messaging used for TurboTax services, despite the small fraction of users eligible to use TurboTax services at no cost. Chief Administrative Law Judge D.

After independently evaluating the evidence, the Federal Trade Commission has held that “Intuit has engaged in deceptive advertising in violation of the FTC Act” and has issued a comprehensive order against Intuit to prevent the company from future truth-in-advertising violations.

Complaint Counsel claim that, since at least 2016, Respondent has advertised through television, radio, and online ads that consumers could file their taxes for free using TurboTax, when in fact, two thirds of taxpayers were not eligible to file with the free TurboTax product. Compl. ¶ 21; CCB 10; Johnson Tr.

The federal agency, after an investigation prompted by ProPublica's reporting, blasted Intuit for misleading customers about its “free” tax-filing program and directed the company to take specific steps to fix its ads.

The FTC first sued Intuit in March 2022 over the ads pitching free TurboTax products. The commission said about two-thirds of tax filers in 2020 would have been ineligible for the company's free offerings, such as freelance workers who received 1099 forms and people who earned farm income.

Whenever possible, the FTC uses the money it collects from defendants to provide refunds to injured consumers. If there is any money left in the settlement fund after the first distribution, the FTC may send a second round of payments. The FTC sends money that cannot be distributed to consumers to the U.S. Treasury.

100% Accurate Expert-Approved Guarantee: If you pay an IRS or state penalty (or interest) because of an error that a TurboTax tax expert or CPA made while providing topic-specific tax advice, a section review, or acting as a signed preparer for your return, we'll pay you the penalty and interest.

Case Summary. The Federal Trade Commission is taking action against Intuit Inc., the maker of the popular TurboTax tax filing software, by issuing an administrative complaint against the company for deceiving consumers with bogus advertisem*nts pitching “free” tax filing that millions of consumers could not use.

TurboTax is a software package for preparation of American income tax returns, produced by Intuit. TurboTax is a market leader in its product segment, competing with H&R Block Tax Software and TaxAct. TurboTax was developed by Michael A. Chipman of Chipsoft in 1984 and was sold to Intuit in 1993.

Is there really a lawsuit against TurboTax? ›

In 2022, Attorney General Bonta, as part of a coalition of 51 attorneys general and with the Los Angeles City Attorney and Santa Clara County Counsel, announced a $141 million settlement against Intuit, resolving allegations that the California-based company deceptively advertised its “free” online TurboTax products.

On May 4, 2022, a coalition of state attorneys general announced a $141 million settlement with Intuit that compensated Intuit TurboTax customers who paid for tax preparation services that should have been free for them. Approximately 4.4 million consumers nationwide received a payment.

In an opinion and final order, the Federal Trade Commission ruled that Intuit engaged in deceptive practices by running ads claiming consumers could file their taxes for free using TurboTax — when in fact many taxpayers did not qualify for such free offerings. ( AP Photo/Gene J. Puskar, File) By WYATTE GRANTHAM-PHILIPS.

Intuit has dominated the tax software market since 1993, when for $225 million, it bought Chipsoft, the San Diego-based company that had created TurboTax.

Intuit (INTU) Ownership Overview

The ownership structure of Intuit (INTU) stock is a mix of institutional, retail and individual investors. Approximately 48.31% of the company's stock is owned by Institutional Investors, 3.94% is owned by Insiders and 47.75% is owned by Public Companies and Individual Investors.

If you're ever assessed an IRS or state penalty or interest due to a TurboTax calculation error, we'll pay you the penalty and interest. Our Audit Risk Meter will show you just where you stand before you file. Of course, even with a spotless tax return, there's always a rare chance you may be randomly audited.

The Federal Trade Commission has issued an Opinion and Final Order that Intuit Inc., the maker of the popular TurboTax tax filing software, engaged in deceptive advertising in violation of the FTC Act and deceived consumers when it ran ads for “free” tax products and services for which many consumers were ineligible.

The FTC said that TurboTax's “file FREE” claims misled people because most people didn't qualify for “$0 to file.” Except they only found that out well after they spent a lot of time putting all their info into the system. As a result, the FTC ordered Intuit to stop making false “free” claims.

Cons: More expensive than other tax-filing software. Just simple tax returns (including taxpayers with only W-2 income) qualify for TurboTax Free Edition. Processing state tax returns generally costs extra.

For those who want to get their taxes done quickly with as little headache as possible, TurboTax is the leading contender. While it's not the cheapest option available, the breadth of product options and smooth process make it worth the cost.