Under the terms of a settlement signed by the attorneys general of all 50 states, Mountain View, California-based Intuit Inc. will suspend TurboTax’s “free, free, free” ad campaign and pay restitution to nearly 4.4 million taxpayers, New York Attorney General Letitia James said. TurboTax is returning to the Super Bowl with its 10th consecutive spot as part of its new 2023 brand campaign designed to remind people that they can come to the platform and not do their taxes. An audit released on Feb. 3 by the Treasury Inspector General for Tax Administration found that last year, 14 million people who qualified for Free File instead paid what ProPublica estimated could amount to about $1 billion in tax prep services to various companies.

At the end of many of Intuit's ads is a disclaimer in smaller print that states such offers are limited to those with "simple" tax returns. But the FTC argues that the disclaimers "are inadequate to cure the misrepresentation that consumers can file their taxes for free using TurboTax," when in many cases they cannot. As the NFL’s official sponsor for financial and accounting software, as well as tax preparation services and the presenting sponsor of both the AFC and NFC Championship Games, the campaign has the unique opportunity to connect with the league’s 180 Million fans at the height of tax season.

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Impacted customers will automatically receive a direct payment of approximately $30 for each year that they paid for tax filing services that were advertised as free. The company reaffirmed its commitment to providing Americans with free tax preparation and filing and expects to help more than 40 million taxpayers prepare and file their tax returns free of charge over the next three years. "Intuit is clear and fair with its customers, including with the nearly 100 million Americans who filed their taxes free of charge with our products over the last eight years — more than all other tax prep software companies combined," McLean added.

This year, consumers whose adjusted gross income is $73,000 or less can use products in the IRS Free File Program, which are offered by several different companies, to file their federal tax return and, in some instances, state tax return, entirely for free. The complaint says that for years, much of Intuit's advertising for TurboTax's online service has emphasized the message that consumers can use TurboTax to file their taxes for free. The FTC points to TV commercials for TurboTax in which the word "free" is said over and over. This is the third year the brand campaign is focused on the company's TurboTax Live offerings. Leveraging Intuit’s AI-driven expert platform, TurboTax Live matches filers with a tax expert with the experience to handle their unique tax situation, who, in just one meeting, will prepare, sign and file their taxes for them.

FTC Sues Intuit Over TurboTax Ads Offering Free Tax Filing

NEW YORK (AP) — New York's attorney general announced Wednesday that the company behind the TurboTax tax-filing program will pay $141 million to customers across the United States who were deceived by misleading promises of free tax-filing services. NEW YORK (AP) — The company behind the TurboTax tax-filing program will pay $141 million to customers across the United States who were deceived by misleading promises of free tax-filing services, New York’s attorney general announced, Wednesday. Whether it’s a question of advertising or SEO, the result seems to be that some low-income taxpayers who qualify to file for free are still https://turbo-tax.org/intuit-ad-for-turbotax/ paying for TurboTax this tax season — even after the change in the agreement with the IRS. Lyle Hill, a warehouse worker in Georgia with an adjusted gross income of $10,390 last year, said he was looking to file his taxes for free, but he got confused and ended up paying $120 to file his federal and state taxes through Free Edition. Intuit, he added, declined to refund his fees when he subsequently told the company he’d been steered into a paid option when he’d wanted the free one. Alvyn Velazquez, a student in New York, recounted a similar journey that ended with him paying $120 after going through the Free Edition portal.

Today, the US Federal Trade Commission (FTC) sued Intuit, the maker of tax preparation software TurboTax, over deceptive advertising campaigns pitching free tax filing products that millions couldn't use. "This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal." With Free File, the industry agreed to offer free tax services to people with low and moderate incomes, and in exchange, the IRS promised not to compete against the private companies. The IRS rescinded its promise not to enter the tax return software https://turbo-tax.org/ and e-file services market in late 2019 but so far hasn't offered its own tax filing software. "TurboTax is bombarding consumers with ads for 'free' tax filing services, and then hitting them with charges when it's time to file," said the Director of the Bureau of Consumer Protection, Samuel Levine. James said her investigation into Intuit was sparked by a 2019 ProPublica report that found the company was using deceptive tactics to steer low-income tax filers away from the federally supported free services for which they qualified — and toward its own commercial products, instead.

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“We empower our customers to take control of their financial lives, which includes being in charge of their own tax preparation,” an Intuit spokesperson told ProPublica in a statement, in 2019. One was through its participation in the Internal Revenue Service’s Free File Program, geared toward taxpayers earning roughly $34,000 and members of the military. Intuit withdrew from the program, in July 2021, saying in a blog post that the company could provide more benefits without the program’s limitations.

Seeing an opportunity, as the Web's social media allegiance switched from Facebook to Twitter, Intuit entered the fray with a TurboTax Twitter ad. The banner, born of a
partnership with Google and Twitter, soothed tax-time anxiety by streaming dynamic, real-time feedback to consumer questions about taxes straight from the TurboTax Twitter page. The goal was to
recruit the social media audience, and enthusiasts responded in droves, resulting in a 69% increase in Turbo Tax Twitter followers over a two-week period. The investigation was sparked by a 2019 ProPublica report which claimed that Intuit executives knew they were deceiving customers by advertising free services that were not free to everyone.

Get matched to a dedicated tax expert who will do your taxes for you so you’re free to do…not taxes.

On Dec. 30, the IRS announced it was revamping a long-standing agreement with the online tax preparation industry in which companies offer free filing to people with incomes below certain levels, a category that includes 70% of filers. The change in what’s known as the Free File program came in the wake of multiple ProPublica articles that revealed how the companies in the program steered customers eligible for free filing to their paid offerings. Under the updated agreement, the companies are now prohibited from hiding their Free File webpages from Google searches, and the IRS was allowed to create its own online tax-filing system. Intuit is accused of steering customers away from the IRS Free File program that is free to 70 percent of taxpayers while using misleading ads to promote a separate "freemium" TurboTax product that isn't actually free to most people. Intuit agreed to the settlement with all 50 US states and the District of Columbia.

TurboTax has received a number of complaints regarding its advertising of the free version. However, state tax filing is not free, and the cost of using TurboTax to file state returns is not presented to the user until they've already completed entering their information for federal returns. 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 advertisements pitching “free” tax filing that millions of consumers could not use. In addition, to prevent ongoing harm to consumers rushing to file their taxes, the Commission also filed a federal district court complaint asking a court to order Intuit to halt its deceptive advertising immediately.

• Consumers are expected to receive a direct payment of approximately $30 for each year that they were deceived into paying for filing services, James said.
• In one ad, a shopper in a women’s clothing department is greeted affectionately by a store employee who remembers doing her taxes the previous week.
• "The website lists ‘Free, Free, Free,’ and the customers are assuming their return will be free," an internal company PowerPoint presentation reportedly said.
• Under the agreement, Intuit will provide restitution to consumers who started using the commercial TurboTax Free Edition for tax years, 2016 through 2018, and were told that they had to pay to file even though they were eligible for the version of TurboTax offered as part of the IRS Free File program.
• It also has authorized the filing of a separate administrative complaint alleging that Intuit's practices are illegal as they violate the FTC Act.

Alongside its online ad campaign, Intuit also has three active, national television advertisements for Free Edition that have aired more than 12,000 times since premiering in January 2019, according to metrics from iSpot.tv, a company that tracks TV advertisements. And on Facebook and Instagram, there are more than 500 active advertisements that mention the word “free” and redirect users to download the TurboTax app — in which users cannot access Free File — and to the Free Edition landing page. Tax software companies made around $1 billion in revenue by charging people who were eligible to file for free.

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A federal court has denied for a second time H&R Block’s attempt to prevent Intuit from airing two TV commercials for TurboTax that poke fun at part-time tax preparers who work for retail tax chains like Block. Full expense that a user will bear.” According to a Google spokesperson, TurboTax’s ads do not violate its terms. The spokesperson said Google requires advertisers to disclose “criteria for any free offers.” TurboTax discloses that Free Edition applies only to “simple tax returns” on its landing page. Outside of the advertising realm, TurboTax still appears to favor products like Free Edition.