TurboTax Lawsuit Claims Intuit Falsely Advertises Its Tax-Filing Service As Free

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FTC Intuit TurboTax Not Free Lawsuit Overview: 

• Who: The Federal Trade Commission (FTC) has filed a lawsuit and asked for a temporary restraining order for Intuit Inc. 
• Why: The FTC claims Intuit falsely advertises its TurboTax tax-filing service as free when that is not the case for the majority of consumers who use it. 
• Where: The complaint was filed in California federal court. 

The Federal Trade Commission (FTC) wants to block Intuit’s TurboTax from being able to advertise that it can do taxes for free, telling a California federal court that that is often not the case.

The FTC claims Intuit deceives consumers by marketing its tax-filing services as free and, in addition to filing a complaint against the company, asked for a temporary restraining order to be granted. 

Barring a temporary restraining order, the FTC says Intuit will “be free to continue disseminating the deceptive claim that consumers can file their taxes for free using TurboTax when, in truth, in numerous instances, defendant does not permit consumers to file their taxes for free using TurboTax.” 

The FTC says Intuit goes to great lengths to falsely advertise that its tax-filing services are free, including in the company’s television commercials. 

“In truth, TurboTax is only free for some users based on the tax forms they need,” the FTC said. “For many others, Intuit tells them, after they have invested time and effort gathering and inputting into TurboTax their sensitive personal and financial information to prepare their tax returns, that they cannot continue for free; they will need to upgrade to a paid TurboTax service to complete and file their taxes.”

Intuit Goes To Great Lengths To Advertise TurboTax As ‘Free’

In one of Intuit’s advertising campaigns for TurboTax, called “Absolute Zero,” the FTC argues the company tells consumers its services are “truly free” and includes the words “Free Guaranteed.” 

The FTC also points to a campaign called “Free, Free, Free, Free” in which Intuit has actors repeatedly say the word “free” with some 30-second ads including the word “free” more than 40 times, according to the complaint. 

While many of Intuit’s ads contain a disclaimer that the TurboTax filing services are only free for consumers with “simple tax returns,” the FTC argues the disclaimer is “inadequate to cure the misrepresentation that consumers can file their taxes for free using TurboTax.”

The FTC notes in its complaint that the disclaimer is both written in fine print and not read by the announcer in the commercials. 

“Given this advertising, reasonable consumers may believe that the TurboTax products and services Intuit advertises as free are free for them—that they can file their taxes for free using TurboTax,” the FTC says.

In 2020, a judge rejected a proposed $40 million settlement between Intuit and consumers who argued the company had steered them away from using the free edition of TurboTax even though they qualified to use it. 

Have you used Intuit’s TurboTax service to file your taxes? Let us know in the comments! 

The FTC Intuit TurboTax Not Free Lawsuit is Federal Trade Commission v. Intuit Inc., Case No. 5:22-cv-01973, in the U.S. District Court for the Northern District of California.

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