The Federal Trade Commission won a major success in its long-running investigation and case against Intuit’s advertisements for tax preparation software TurboTax, with the agency’s in-house administrative court determining that the company misrepresented the product as free.
Federal Trade Commission won in its investigation over Intuit’s Advertisements (Photo: Brookings)
The outcome was confirmed by Intuit. According to a person familiar with the situation, the judgement was made on Wednesday and will stay sealed until September 6, pending redactions. The decision is a victory for Federal Trade Commission Chair Lina Khan, who has pledged to crack down on corporate abuses throughout the economy.
In the recent published article by Politico, “No one should be surprised by the Federal Trade Commission’s ruling given that it came from an FTC-employed judge in a case that the Commission brought before itself,” Intuit spokesperson Derrick Plummer said.
Intuit has stated that it will appeal the decision. Appeals from administrative law judge rulings are made first to the Federal Trade Commission’s commissioners, who are led by Khan.
According to the source with knowledge, the order by Administrative Law Judge Michael Chappell will require Intuit to alter how it markets its TurboTax products. Among the modifications is the company’s inability to use the phrase “simple returns only” when describing which tax forms are free. Instead, the forms will have to be expressly named.
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In March 2022, the Federal Trade Commission filed a lawsuit against Intuit, accusing it of misleading customers into believing they could submit their taxes for free. As per to the Federal Trade Commission, many customers were told to pay a fee after starting the procedure in order to finish submitting their taxes.
According to Reuters, in April 2022, a U.S. judge denied the Federal Trade Commission’s attempt to prevent Intuit from conducting advertisements for “free” tax filing products.
In May 2022, Intuit agreed to pay $141 million in restitution to settle charges by all 50 U.S. states and Washington, D.C., that it duped millions of customers into purchasing TurboTax items that were advertised as “free.”
The settlement settled charges that Intuit misled at least 4.4 million consumers, many of whom were low-income, into purchasing its tax preparation product despite their eligibility for free electronic filing with the IRS.
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