FTC sues Intuit to stop 'bait-and-switch' TurboTax ads
Source: Associated Press, via Yahoo! Finance
Associated Press
FTC sues Intuit to stop 'bait-and-switch' TurboTax ads
TALI ARBEL
Tue, March 29, 2022, 1:41 PM
The Federal Trade Commission is suing TurboTax maker Intuit, saying its ads for free tax filing misled consumers. Intuit says it will fight the suit. ... The consumer protection agency said Tuesday that millions of consumers cannot actually use the free tax-prep software option two-thirds of tax filers in 2020. They are ineligible, the agency says, if they are gig workers or earn farm income, for example. ... TurboTax is bombarding consumers with ads for free tax filing services, and then hitting them with charges when its 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.
The agency says Intuit has for years focused on the word free in its ads, running them during major events like the Super Bowl. The FTC has asked a federal judge to order Intuit to stop what it said were Intuits deceptive ads during the rush of tax season. This years tax filing deadline is April 18.
Intuit, based in Mountain View, California, said in a statement late Monday night that it will challenge the lawsuit. "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, said Kerry McLean, executive vice president and general counsel of Intuit. McLean said nearly 100 million Americans have filed taxes for free over the past eight years using TurboTax.
The FTC voted 3-1 in favor of filing the suit. The FTC complaint was filed Monday in U.S. District Court in Northern California. ... Intuit offered a free version of TurboTax through the IRS Free File Program for low-income filers until 2021, when they quit the program, saying they wanted to focus on further innovating in ways not allowable under the current Free File guidelines. ... The Free File system, a partnership between the tax industry and the IRS, was designed to help low- and middle-income taxpayers file online, but it has long faced criticism of being too little supported. ProPublica has reported on efforts by the tax prep industry to nudge consumers into using paid products. (1)
(1) https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free
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Read more: https://finance.yahoo.com/news/ftc-sues-intuit-stop-bait-174118160.html
ultralite001
(891 posts)That is all...
rsdsharp
(9,042 posts)now H&R Block after a bad experience.
I bought the program with a free state return. When I loaded it, the program wouldnt update. I thought Id just do it later, and completed the Federal portion. When I went to download the state forms, it wanted money. So I paid. And it wouldnt download.
Thats when I switched to Tax Cut.
Locrian
(4,522 posts)Stuart G
(38,365 posts)..not new either....Intuit knew..& I know....Here is why?...
........For 28 years I taught ..".Consumer Education" in the public schools of Chicago...
......at first it was a one or two day lesson as a side step in...." U.S. History"
Then when they offered the course...Called ..".Consumer Education"...I taught the entire course..
Bait and Switch.........and....Free Gift ........were part of a 7 part chapter on common frauds used around the country..
It ain't new, says Stu............and...Intuit knew exactly what it was doing....
DENVERPOPS
(8,679 posts)We had that same course in Jr High! It talked about false and misleading advertising, paid testimonials, common con jobs, etc etc
It was great! I had it in like 61.......
Then Reagan came in and shit canned every regulatory agency he could and castrated the rest.....FTC, Consumer Protection, etc
Do the even teach this to the kids today/???????? It should be, more than ever. I watch the commercials and read ads, and I think to myself: At best this is misleading, but more like False Advertising. And there is no one going after them.....
Corporations are almost all the way to becoming part of the Government.....LOL
Then I guess they will all be happy, with the newly installed: Corporate Fascist Tyranny of America.....
SWBTATTReg
(21,859 posts)But I already was forewarned, in that 'nothing is ever free' and I expected this to be true w/ Intuit. As it turned out, apparently this is true with Intuit.
Midnight Writer
(21,548 posts)mahatmakanejeeves
(56,904 posts)Inside TurboTaxs 20-Year Fight to Stop Americans From Filing Their Taxes for Free
Using lobbying, the revolving door and dark pattern customer tricks, Intuit fended off the governments attempts to make tax filing free and easy, and created its multi-billion-dollar franchise.
by Justin Elliott and Paul Kiel Oct. 17, 2019, 5 a.m. EDT
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Intuit began in the 1980s as an accounting software company focused on helping people with their bookkeeping. Over time, the company, like the other giants of Big Tech, cultivated an image of being not just good at what it did, but good, period. In a recent Super Bowl ad, Intuit portrayed itself as a gentle robot that liberates small-business owners from paperwork. The company stresses values above all, urging employees to deliver awesome and pursue integrity without compromise.
Intuits QuickBooks accounting product remains a steady moneymaker, but in the past two decades TurboTax, its tax preparation product, has driven the companys steadily growing profits and made it a Wall Street phenom. When Smith took over in 2008, TurboTax was a market leader, but only a small portion of Americans filed their taxes online. By 2019, nearly 40% of U.S. taxpayers filed online and some 40 million of them did so with TurboTax, far more than with any other product. ... But the success of TurboTax rests on a shaky foundation, one that could collapse overnight if the U.S. government did what most wealthy countries did long ago and made tax filing simple and free for most citizens.
For more than 20 years, Intuit has waged a sophisticated, sometimes covert war to prevent the government from doing just that, according to internal company and IRS documents and interviews with insiders. The company unleashed a battalion of lobbyists and hired top officials from the agency that regulates it. From the beginning, Intuit recognized that its success depended on two parallel missions: stoking innovation in Silicon Valley while stifling it in Washington. Indeed, employees ruefully joke that the companys motto should actually be compromise without integrity.
Internal presentations lay out company tactics for fighting encroachment, Intuits catchall term for any government initiative to make filing taxes easier such as creating a free government filing system or pre-filling peoples returns with payroll or other data the IRS already has. For a decade proposals have sought to create IRS tax software or a ReturnFree Tax System; All were stopped, reads a confidential 2007 PowerPoint presentation from an Intuit board of directors meeting. The companys 2014-15 plan included manufacturing 3rd-party grass roots support. Buy ads for op-eds/editorials/stories in African American and Latino media, one internal PowerPoint slide states.
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wcmagumba
(2,871 posts)COL Mustard
(5,784 posts)But I do hate it when I'm getting a refund, and they offer to expedite it to me for something like $29.99 plus a processing fee deducted directly from my refund! No thanks. I've e-filed every year that I have been able to, and I've never ever had a problem. This year I filed our taxes and we got back our refund from the IRS in less than 10 days. But yeah, you have to read the fine print, and I wish they wouldn't advertise something that people need but can't get.
Martin68
(22,671 posts)Mawspam2
(706 posts)...in which I walked around a new Ford F-150 and pointed to the truck and said, "Free. Free. Free, free, free. Free, free. Free, free, free, free, free. Free."?
not fooled
(5,791 posts)The real American way: big business buying the government so that the non-wealthy get screwed. Extract money for what should be a free service provided by the IRS, for most Americans--filing taxes using payroll and other income information the government already has. Rent-seeking in yet another sector of society. Disgusting.
Bengus81
(6,907 posts)Seeing how back then I was self employed and my return cost around 250-300
DownriverDem
(6,206 posts)I"ve used turbotax for years and have paid. Any suggestions for what to use for this year?
mahatmakanejeeves
(56,904 posts)Maybe, you can file for free directly at the IRS. If there is any complexity to your return, it might be the case that you use a form that is not supported by the free filing option.
See this thread:
Thu Mar 24, 2022: Taxes 2022: Here's where to file your taxes for free
and this reply in particular:
IronLionZion
(45,261 posts)There are cheaper options available
Best Tax Software for 2022
https://www.nerdwallet.com/article/taxes/best-tax-software
Bengus81
(6,907 posts)Retired,have a simple filing jointly return. Free?? ROFLMAO!! But...this year mine was nearly $50 cheaper. It's not because they know their lying,it's because of competition.
Thunderbeast
(3,383 posts)After years using TurboTax and Tax Cut, I decided that 90% of the work was collecting the input data.
This year, I had to deal with a real estate capital gain, and the federal forms and instructions were absolutely an opaque nightmare.
Most of the data are already on file with the IRS. Vomiting it back on a tax return makes no sense in the 21st century. The IRS should email a proposed return, and ask for exception reporting for things they don't know about (capital gains, charity, rental income). Local tax authorities can upload their data as well.
Tax complexity is the result of too many greedy fingers writing tax law for their personal gain. The tax-prep industry gains much by this nonsense.
Polybius
(15,239 posts)The only charge is $9.95 for the federal income tax. Everything else is completely free.