On Tax Day, Warren Blasts Intuit for Deceptive TurboTax Ads and Junk Fees, Urges the FTC to Continue Cracking Down

On Tax Day, Warren Blasts Intuit for Deceptive TurboTax Ads and Junk Fees, Urges the FTC to Continue Cracking Down

New investigation reveals Intuit efforts "to trick and trap TurboTax users into paying junk fees to file even very simple tax returns."

For years, Senator Warren has led the fight for an easy and free option for Americans to file taxes directly with the IRS.

Text of Letter (PDF)

Washington, D.C. - Today, U.S. Senator Elizabeth Warren (D-Mass.) sent a letter to Chair Lina M. Khan of the Federal Trade Commission (FTC), blasting Intuit, the maker of TurboTax, for continuing to relentlessly upsell TurboTax users despite numerous FTC and state lawsuits and settlements. Senator Warren applauded the FTC's oversight of Intuit, and urged the Commission to continue to take action to protect taxpayers from tax preparation companies that pile junk fees onto users..

"Filing taxes should be free and simple. But instead, Americans spend an average of nine hours, and $150, to file their taxes, thanks to junk fees charged by Intuit and others," wrote Senator Warren.

A new staff analysis conducted by the Senator's staff, a review of TurboTax's current website, revealed that a sample taxpayer with a simple filing situation who would qualify for the IRS free Direct File tool would instead pay $133 for federal and state filing on TurboTax - and get upsold or solicited for additional costly services eight more times in the process.

"This month, my staff's test of TurboTax revealed the cost of the filing service for ordinary taxpayers, and its ongoing efforts to upsell taxpayers repeatedly during the tax filing process - including forcing taxpayers to pay to upgrade even in tax situations that are supported for free on IRS Direct File tool," wrote the senator. "Although each taxpayer is unique, with different income, income sources, and family circumstances, this sample taxpayer provides a concrete example of how TurboTax still appears to be ripping off taxpayers."

The FTC first sued Intuit in 2022 for falsely advertising its products as free, and this January, the FTC issued an opinion that Intuit had violated the Federal Trade Commission Act by advertising practices in which it "ran ads for 'free' tax products and services for which many consumers were ineligible," and prohibited Intuit from "advertising or marketing that any good or service is free unless it is free for all consumers," unless Intuit discloses "clearly and conspicuously" the percentage of taxpayers who qualify for the free service.

"Despite these FTC actions, Intuit continues to try to trick and trap TurboTax users into paying junk fees to file even very simple tax returns," wrote the senator.

"Given Intuit's ongoing anti-taxpayer practices, it is outrageous that the company continues to fight the FTC lawsuit and lobby against the IRS Direct File program," Senator Warren concluded. " I applaud your work to crack down on Intuit's false advertising and junk fees, and urge you to continue your efforts to protect taxpayers from these schemes."

Senator Warren has been at the forefront of holding tax prep companies accountable for abuses and has led the fight for a free, direct E-File program to make tax filing simpler and more affordable for millions of Americans:

• In March 2024, at a hearing of the U.S. Senate Finance Committee, Senator Warren highlighted the positive feedback that the IRS's Direct File pilot in 12 states has received from taxpayers, confirmed by Secretary of the Treasury Janet Yellen.

• In February 2024, Senators Warren, Blumenthal, Sanders, and others blasted Intuit for evading questions about its massive tax breaks.

• In January 2024, Senators Warren, Blumenthal, Sanders, and others sent a letter to Intuit, requesting a full accounting of the expenses underlying the company's massive federal research tax breaks.

• In October 2023, Senators Warren, Ron Wyden, Chair of the Senate Finance Committee, Blumenthal, Tammy Duckworth, Sanders, Sheldon Whitehouse, and Representative Katie Porter sent letters to five tax preparation companies-H&R Block, TaxAct, TaxSlayer, Ramsey Solutions, and Intuit-that recently received notices of penalty offenses from the Federal Trade Commission (FTC) regarding the misuse of taxpayer's sensitive and confidential information.

• In July 2023, Senators Warren, Wyden, Blumenthal, Duckworth, Sanders, and Whitehouse and Representative Porter released a report revealing the outrageous, extensive, and potentially illegal sharing of taxpayers' sensitive personal and financial information with Meta by online tax preparation companies. The lawmakers also sent a letter to the IRS, the Treasury Inspector General for Tax Administration, the Federal Trade Commission, and the Department of Justice highlighting their key findings and calling on these departments to fully investigate this matter and prosecute any company or individuals who violated the law.

• In June 2023, Senators Warren and Tom Carper and Representatives Brad Sherman, Porter and Don Beyer, led a coalition of 99 Democratic lawmakers in a letter to IRS Commissioner Daniel Werfel and Deputy Treasury Secretary Adewale Adeyemo, applauding the IRS's announcement of a pilot of a free tax filing tool next year.

• In April 2023, Senators Warren and Carper led 29 other senators in a letter to the IRS Commissioner, urging the agency to simplify the tax process and broaden access to free e-filing options.

• In April 2023, at a hearing of the Senate Finance Committee, Senator Warren questioned the IRS Commissioner about the agency's failed Free-File partnership with private tax preparation software companies and called on the agency to implement a direct E-File program.

• In December 2022, Senators Warren and Wyden and Representatives Porter and Sherman sent letters to tax preparation companies H&R Block, TaxAct, and TaxSlayer, plus big tech firms Meta, and Google, amid reports that the tax preparation companies have been secretly transmitting individual taxpayers' sensitive financial information to Meta and Google

• In August 2022, Senator Warren highlighted key priorities she secured in the Senate's Inflation Reduction Act, including establishing an IRS task force to look into developing and running an IRS-run free direct E-File tax return system, based on Senator Warren's Tax Filing Simplification Act.

• In July 2022, Senator Warren led 22 lawmakers to introduce the Tax Filing Simplification Act of 2022, legislation that would direct the IRS to develop its own free online tax preparation and filing service that would simplify the tax filing process for millions of Americans

• In June 2022, at a hearing of the Senate Finance Committee, Secretary of Treasury Janet Yellen agreed with Senator Warren on the need to create a free tax filing system that actually works for Americans.

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