It turns out those TurboTax ads promising "free free free free free" tax filing aren't just annoying — they may also be intentionally misleading, according to the Federal Trade Commission.
The consumer protection agency is suing TurboTax parent company Intuit to stop what it calls a "bait-and-switch" con job. While TurboTax does offer a free option, most people — up to two-thirds of tax filers in 2020 — aren't eligible to use it because their returns aren't simple enough. Nevertheless, TurboTax has made the word "free" the focus of its ad campaigns for years.
“TurboTax is bombarding consumers with ads for ‘free’ tax filing services, and then hitting them with charges when it’s time to file,” said Samuel Levine, Director of the Bureau of Consumer Protection, in a statement. “We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season.”
Intuit says it has helped 100 million taxpayers file for free in the last eight years. "Far from steering taxpayers away from free tax preparation offerings, our free advertising campaigns have led to more Americans filing their taxes for free than ever before and have been central to raising awareness of free tax prep,” says Kerry McLean, executive vice president and general counsel of Intuit. McLean notes that 17 million taxpayers were able to file for free in 2021, up from 11 million in 2018, before TurboTax ads started focusing on free filing.
The FTC is asking the company stop what it calls deceptive advertising during the tax season. Whether that happens, the fact remains that for most of us, we still have to file — free or not — by April 18.