FTC: Intuit must stop advertising TurboTax as 'free'

The FTC on Tuesday ordered Intuit to stop advertising TurboTax as free, unless it was free to all users or it clarified who does not have to pay. File Photo by Coolcaesar at en.wikipedia.

Jan. 23 (UPI) -- The FTC ordered TurboTax owner Intuit Inc. to cease marketing the tax filing software as free unless it is free for all consumers or Intuit clearly shows the percentage of taxpayers who qualify for the free service.

In the order filed Monday, the FTC said Intuit deceived consumers by falsely claiming Turbotax is free when many consumers must pay to use them.

The agency said if a majority of consumers don't qualify for the free offer, Intuit could state that a majority of consumers don't qualify instead of providing a percentage indicating the amount who do.

If the company chose to display the data showing the percentage of qualifying consumers it must be located near any representations claiming TurboTax is free.

The FTC order also requires Intuit to clearly and conspicuously disclose all of the terms, conditions and obligations required to qualify for the free tax filing service. If advertisements and marketing appeals for the TurboTax app and service don't have room for the qualifying terms and conditions, Intuit can include a link to the detailed terms and conditions.

The FTC order also banned Intuit from misrepresenting the cost, refund policies or tax filers' ability to obtain a tax credit or deduction or file their taxes online without using the paid TurboTax service. Intuit must compile reports for the next 20 years that show its compliance with the FTC order.

Judge D. Michael Chappell in September ruled Intuit "engaged in deceptive advertising in violation of Section 5 of the FTC Act"after FTC officials filed an administrative complaint in the matter in March 2022.

"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," Chappell said in his September ruling.