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FTC Sues Intuit Over 'Free' TurboTax Software

The FTC alleges millions can't use the free program.

Tax Season 2022
Sarah Tew/CNET

The US Federal Trade Commission has issued a complaint against Intuit over its TurboTax software, alleging the company is deceiving consumers by calling its tax filing software "free." 

Millions of people can't use the free program, the FTC said Tuesday. Around 66% of all tax filers couldn't use the free TurboTax product in 2020, according to the FTC. It's not available to those with a 1099 form for work in the gig economy or for those earning a farm income, for example.

"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. "We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season."

The FTC is seeking a court order to halt Intuit from running what the FTC calls its "deceptive advertising" now, pointing to an ad that had a disclaimer on screen while a voiceover said "TurboTax Free is free. Free, free, free, free."

Intuit called the FTC's arguments "simply not credible" in a statement, adding that almost 100 million Americans have filed their taxes for free over the last eight years using TurboTax.

"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.