Federal regulators have ruled that Intuit, the maker of tax-filing software TurboTax, must stop marketing its services as free unless they are free for everyone or exceptions are clearly disclosed. .
TurboTax has claimed for years that customers can file their taxes online for free. The Federal Trade Commission said in an opinion and final order issued Monday that its advertising was misleading because two-thirds of taxpayers were not eligible for the free product filing.
The Commission also found that the company’s efforts to disclose that not everyone qualified for free services were “ineffective and often inconsistent”.
Examples of ineligible taxpayers include those claiming the mortgage and property deductions, charitable donations over $300, unemployment income, investment income, rental property income, and certain education expenses. Gig workers who reported income as independent contractors, including many delivery drivers, were also ineligible.
Samuel Levin, director of the FTC’s Bureau of Consumer Protection, described Intuit’s violations as “serious.”
Federal regulators cited misleading language in the company’s “AbsoluteZero” advertising campaign. That campaign included the phrase “Free Guarantee” and told consumers, “At least your taxes are free.”
“This order also sends a message throughout the industry – ‘free’ means free – not ‘free for some’ or ‘free for some,’” Mr. Levin. said in a statement, “If businesses use the power of ‘free’ in the dishonest manner that Intuit did, they can expect FTC enforcement action.”
The FTC’s order not only bars TurboTax from marketing its products for free unless the products are free to all, it also requires it to “clearly and conspicuously” disclose the percentage to taxpayers or consumers. There are also requirements that qualify for the free product or service. Alternatively, TurboTax may reveal that most consumers do not qualify.
Intuit said in a statement that the decision was “grossly flawed” and that the company would appeal it.
“This decision is the result of a partisan and broken system where the Commission acts as accuser, judge, jury and then appellate judge in the same case,” the statement said.
In 2022, following a multistate investigation led by New York Attorney General Letitia James, Intuit agreed to pay $141 million to more than four million Americans who were incorrectly charged for tax services. , which were falsely advertised as free. The company did not admit fault in the settlement.
Settlement checks were sent last year, according to The Associated Press, they were impressed primarily low-income taxpayers who is worthy of one Free Federal Tax Service Program Operated by the Internal Revenue Service.