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FTC bars TurboTax’s Intuit from advertising ‘free’ tax services

  • TurboTax can't advertise free services without saying who is eligible
  • Order comes from FTC, which sued over deceptive practices
  • TurboTax said it would appeal decision to outside federal court

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(NewsNation) — The Federal Trade Commission issued a final order Monday barring TurboTax and its parent company, Intuit, from advertising free tax services unless they are free for all customers.

The order comes after the FTC investigated Intuit over claims of deceptive advertising. Consumers had complained that products advertised by TurboTax as free actually cost something.

The federal agency ruled Intuit violated the FTC Act and deceived customers.

“The character of the past violations is egregious,” reads the FTC commissioners’ opinion, which details Intuit ads across TV, radio and online over the years. “Intuit blanketed the country with deceptive ads to taxpayers across multiple media channels.”

An FTC judge issued the initial order in September, which Intuit appealed. It was upheld by the commissioners.

Intuit called the ruling a “deeply flawed” decision and vowed to appeal it in a separate federal court.

“This decision is the result of a biased and broken system where the Commission serves as accuser, judge, jury, and then appellate judge all in the same case,” Intuit stated. The California company later added that it believes it will prevail “when the matter ultimately returns to a neutral body.”

The FTC ruled Intuit can advertise products as free if it discloses the percentage of eligible people. Terms and conditions to obtain a free good or service must also be clearly disclosed or linked to if ad space is limited, the FTC said. The order also bars Intuit from “misrepresenting any material facts about its products or services,” including refund policies and price points.

There was no financial penalty in the FTC’s order, but Intuit has previously faced hefty charges over the marketing of “free” services. In a 2022 settlement signed by the attorneys general of all 50 states, Intuit agreed to suspend TurboTax’s “free, free, free” ad campaign and pay $141 million in restitution to nearly 4.4 million taxpayers nationwide.

Checks from that lawsuit settlement began going out in May 2023. Most people were expected to receive a check for about $30, though some may have received up to $85.

The Internal Revenue Service offers resources on how to file taxes for free using partner websites. This year, it also launched a pilot program called Direct File that allows certain taxpayers to file directly with the IRS.

The Associated Press contributed to this report.

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