The FTC ruled this week that Intuit did in fact deceive customers with its ads promoting “free” tax software that wasn’t, in fact, free.
In a ruling Friday, the FTC's Chief Administrative Law Judge, D. Michael Chappell, found that Intuit “engaged in deceptive advertising in violation of Section 5 of the FTC Act” when it ran ads for free tax products and services “for which many consumers were ineligible.”
Chappell also issued a cease-and-desist to the company from engaging in practices alleged in the FTC complaint, as there is a “cognizant danger of a recurring violation.”
Going forward, Intuit can't say its products are free unless they are free for everyone, or the company "clearly and conspicuously" discloses if the service is not free to a majority of US taxpayers and discloses anything that might be misunderstood by taxpayers.
The FTC sued Intuit in March 2022 claiming “TurboTax is bombarding consumers with ads for ‘free’ tax filing services, and then hitting them with charges when it’s time to file.”
In response, Intuit said it "will appeal this groundless and seemingly predetermined decision by the FTC to rule in its own favor and is confident that when the matter ultimately returns to a neutral body Intuit will prevail, as it has previously in this matter,” the company said.
The argument might in some way be moot. Intuit left the IRS Free File program in 2021 and the IRS plans to launch a new free tax filing option for the 2024 tax season.