Business ProfileforIntuit, Inc.

In an initial decision announced today, the Federal Trade Commission’s Chief Administrative Law Judge (ALJ), D. Michael Chappell, ruled that Intuit Inc. (Intuit), the maker of the popular TurboTax tax filing software, “engaged in deceptive advertising in violation of Section 5 of the FTC Act” and deceived consumers when it ran ads for “free” tax products and services for which many consumers were ineligible.

In ruling in favor of complaint counsel—FTC staff in the Bureau of Consumer Protection—the ALJ also found that there is a “cognizant danger of a recurring violation” by Intuit, and issued an order requiring the company to cease-and-desist from engaging in the deceptive practices alleged in the complaint.

Under the terms of the ALJ’s order, which can be appealed to the full Commission, Intuit is “prohibited from engaging in deceptive practices in the future.” It also is barred from representing that any good or service is free, unless: 1) it is free for all consumers; 2) it clearly and conspicuously discloses any terms that would limit the offer and might be misunderstood by consumers; and 3) if the good or service is not free “to a majority of U.S. taxpayers,” this also must be disclosed in a clear and conspicuous manner.

The order also prohibits specific misrepresentations by Intuit regarding the tax preparation and filing services it offers, requires that the order be distributed to relevant parties for the next 20 years, and include strict recordkeeping and reporting provisions to ensure the company’s compliance.

The Staff’s 2022 Complaint

In March 2022, the FTC announced staff was taking action against Intuit by issuing an administrative complaint against the company for deceiving consumers with allegedly deceptive advertisements pitching “free” tax filing that millions of consumers could not use. In addition, to prevent ongoing harm to consumers rushing to file their taxes, Commission staff also filed a federal district court complaint asking a court to order Intuit to halt its deceptive advertising immediately. The district court case was later dismissed, and the case was tried administratively.

In the complaint, FTC staff alleged that the company’s ubiquitous advertisements touting their supposedly “free” products—some of which have consisted almost entirely of the word “free” spoken repeatedly—misled consumers into believing that they can file their taxes for free with TurboTax. In fact, most tax filers can’t use the company’s “free” service because it is not available to millions of taxpayers, such as those who get a 1099 form for work in the gig economy, or those who earn farm income. In 2020, for example, approximately two-thirds of tax filers could not use TurboTax’s free product.

The Appeals Process. The ALJ’s initial decision is subject to automatic review by the full Federal Trade Commission. Any party may file an appeal brief containing its objections to the Initial Decision.  The Commission will conduct a de novo review of the entire record and may schedule oral argument before issuing a final decision. 

Free means free, right? If you’re TurboTax, not always, according to a new ruling from the Federal Trade Commission. And not for everybody, or even most people— even if an ad says “100% free.”

You might remember that, back in early 2022, the FTC took action against Intuit, the company that owns TurboTax. The FTC said that TurboTax’s “file FREE” claims misled people because most people didn’t qualify for “$0 to file.” Except they only found that out well after they spent a lot of time putting all their info into the system. As a result, the FTC ordered Intuit to stop making false “free” claims.

While keeping in mind that free for somebody doesn’t always mean free for you, here’s where to find some real free help on your taxes:

If your adjusted gross income was $79,000 or less, the IRS Free File Program has free guided tax prep software for your federal taxes. Use this tool to find an IRS Free File trusted partner.

For servicemembers or veterans, MilTax is the Department of Defense’s free filing program. There, you can check eligibility, including for family members and survivors. Or start with the FAQs to learn more.

Volunteer Income Tax Assistance (VITA) is an IRS program that helps people who make $64,000 or less, have a disability, or who don’t feel comfortable speaking English. Tax Counseling for the Elderly (TCE) helps people 60 and older.

Keep an eye on this tax season’s IRS’s Free File Fillable Forms, opening any day now, to check eligibility and get online versions of your federal tax forms, but no guidance.

This year, the IRS is launching a Direct File pilot. If you’re eligible and choose to participate in the pilot, you can electronically file your 2023 federal tax return for free directly with the IRS.

Find your state tax agency to find out what help might be available with tax returns in your state.