TurboTax Sued for “Misleading” Advertising

TurboTax Sued for "Misleading" Advertising

(UnitedReader.com) – Federal Trade Commission (FTC) regulators sued the parent company of TurboTax, Intuit, in federal court for misleading advertising. The complaint stated TurboTax’s free tax service ads were lies because its services weren’t available to all users without cost. FTC officials requested an end to the deceptive marketing.

The main claim by the FTC is TurboTax filing services are not free to about 2/3 of all filers because they have farm income or receive 1099s. The advertising from Intuit did not specify these restrictions, leading people to think they could file for free.

Furthermore, TurboTax relied on its own definition of a simple tax return to determine who got no-cost services. The FTC officials said the company failed to provide a clear explanation of the term or its meaning in a way accessible to filers.

The problems began with an investigative report in 2019 by ProPublica stemming from claims TurboTax was making deceptive free filing claims as part of the IRS’s Free File program, which it was a part of until 2021. ProPublica revealed that Intuit made it challenging to find the free filing option and took other measures to complicate the tax filing process for users. After the release of ProPublica’s findings, the FTC began its investigation.

According to Intuit, the company will vehemently defend itself against these accusations. Executive Vice President and general counsel Kerry McLean said it’s ludicrous that the FTC is targeting the company when it has been cooperating with the regulations of the IRS. She also noted that 100 million people have used the free filing option from the company and said TurboTax has always complied with the IRS rules as part of the Free File program.

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