Lawmakers have written a letter to Intuit CEO Sasan K. Goodarzi demanding answers over what they called the company’s “Free File scams.”
Tax preparation companies in the US, including Intuit, have a long history of making it difficult to find Free File options. While any taxpayer making under $69,000 a year can legally file their taxes for free, many companies have gone to great lengths to bury those free options, making it difficult for consumers to find.
Senator Warren, Congresswoman Katie Porter, and Congressman Brad Sherman are taking aim at Intuit specifically, writing a letter demanding answers about the company’s behavor.
We are writing regarding your company’s ongoing pattern of hiring former regulators to defend TurboTax products that scam American taxpayers into paying for services that should be free. Most recently, a court filing related to the Federal Trade Commission’s (FTC) complaint against Intuit for its deceptive advertisements of its “bogus” free tax preparation products revealed that former FTC Commissioner Jon Liebowitz has served as outside counsel for Intuit. Given this new revelation and Intuit’s track record of lobbying to protect its shady business practices, we seek to understand the extent to which Intuit has used former government officials to defend and maintain its unethical and potentially illegal practices that cost American taxpayers billions of dollars.
The lawmakers go on to highlight the general failure of the Free File Program, in addition to Intuit’s role in that failure.
The Free File program has been a failure, scamming taxpayers into paying for services that should be free. Free File was supposed to cover 70% of American taxpayers, but as of 2018, only approximately 3% of taxpayers participated each year. As we noted in 2019, deceptive practices and outright sabotage from Free File companies have driven this under-utilization, and Intuit, with approximately 60% market share in consumer tax software, bears much of the blame for these practices. Intuit deliberately hid its IRS Free File program from Google results using “dark patterns” – adding code into the website to suppress results, and instead pushing taxpayers into their in-house “freemium” edition where they could be tricked into paying into services that should be free under Free File. In addition, Intuit repeatedly changed the names and landing pages for the Free File and freemium programs, creating additional confusion for consumers that are eligible for truly free filing.
The lawmakers want Intuit to provide information on its employees and their relationships with the federal government, in an effort to prevent a repeat of the Jon Liebowitz situation.
It remains to be seen what additional action the lawmakers may propose.