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Lawmakers Go After TurboTax Over Free Filing on Tax Day

Sen. Elizabeth Warren and Reps. Brad Sherman and Katie Porter send a letter to Intuit's CEO.

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The FTC issued a complaint against Intuit's TurboTax software last month.
Tiffany Hagler-Geard/Bloomberg via Getty Images

Three Democratic lawmakers sent a letter to Intuit CEO Sasan K. Goodarzi on Monday seeking answers about its TurboTax software and business practices. 

In the letter, Sen. Elizabeth Warren of Massachusetts and Reps. Brad Sherman and Katie Porter of California allege that Intuit has used "extensive lobbying and adroit influence-peddling" to oppose consumer protections and make it difficult for eligible taxpayers to utilize free filing options, instead directing them to paid services. 

The US Federal Trade Commission also issued a complaint against Intuit's TurboTax software last month. The commission alleged the company is deceiving consumers by calling its tax filing software "free" in ads but then "hitting them with charges when it's time to file." Around 66% of all the tax filers weren't eligible to use the free TurboTax product in 2020, according to the FTC.

Intuit has called the FTC's arguments "simply not credible," adding that nearly 100 million Americans have filed their taxes for free over the past eight years with TurboTax.

Warren, however, said in the letter that the Free File program, a partnership between the IRS and the tax filing software industry that offers free tax software to Americans earning $72,000 or less, "has been a failure" as "deceptive practices and outright sabotage from Free File companies" caused low rates of participation. Intuit left the Free File program in 2021.

"We are clear and fair with our customers and open and transparent about our advertising practices, and our participation in the Free File program was done in compliance and with the oversight of the IRS," an Intuit spokesperson told CNET, adding that it's reviewing the lawmakers' letter and will respond. 

In the letter, which was sent on Tax Day, Warren demands that several questions be answered by May 2. The questions include: How much revenue has Intuit has made off of taxpayers making less than $73,000; how much money has Intuit spent lobbying the federal government; and how many Intuit employees or external partners have previously worked or have subsequently gone on to work for the federal government in tax policy or other positions in the IRS, the Treasury Department or executive branch?