As millions of Americans file their 2021 income taxes online today, Senator Elizabeth Warren (D-MA) is demanding answers from Intuit about its popular TurboTax e-filing product.
In a letter to Sasan K. Goodarzi, CEO of Intuit, Warren says the company used “extensive lobbying and adroit influence” to prevent Americans from filing their taxes online for free.
The Federal Trade Commission (FTC) filed a lawsuit against Intuit in March for misleading marketing, an action Warren calls “both welcome and long overdue.” Representatives Brad Sherman (D-CA) and Katie Porter (D-CA) also signed the letter.
Many of Warren’s complaints center on the Free File program, an IRS partnership with a nonprofit coalition of tax prep companies founded in 2003 to provide free tax services to low-income people. Under the terms of the partnership, 2021 filers with adjusted gross income of $73,000 or less are eligible for the services, which are listed on the IRS website.
Intuit’s participation in the program came under criticism after a series of ProPublica reports showed that both Intuit and H&R Block tricked users who were eligible for free files into paying to file their taxes. The companies have also deliberately made the free versions of their software difficult to find in online search results, according to ProPublica† Intuit left the Free File program in 2021.
In the letter to Goodarzi, Senator Warren writes that “the Free File program has been a failure, defrauding taxpayers into paying for services that should be free,” adding that “deceptive practices and outright sabotage by Free File companies were largely to blame for the low rate of taxpayer participation in the program — a rate of only about 3 percent, Warren’s estimate.
In response, Intuit director of corporate communications Derrick Plummer issued the following statement: The edge†
Intuit believes Americans should be at the center of their financial lives and is proud to have helped more taxpayers file their taxes for free than all of our competitors combined. In the past eight years alone, Intuit’s free tax preparation offering has helped nearly 100 million Americans file their taxes completely free. We are clear and honest with our customers and open and transparent about our advertising practices, and our participation in the Free File program was in accordance with and under the supervision of the IRS. We are studying the letter from Senator Warren and other policymakers and will respond.
Warren’s letter also references a report by OpenSecrets on March 31, which found that Intuit employed former government officials, including former members of Congress, in its lobbying efforts. According to the records, Intuit’s political action committee has made donations to both Democrats and Republicans. The company spent $3.3 million on lobbying in 2021.
Warren’s letter also points to a “revolving door” problem in enforcement, with Intuit hiring former regulators to avert government crackdown. A recent court filing revealed that the company had hired former FTC chairman Jon Leibowitz “to defend itself against an FTC complaint,” which Warren says gives rise to a conflict of interest. A 2019 report from Public Citizen found that Leibowitz was one of dozens of former FTC officials with such potential revolving door conflicts.
Update 22:07 ET: Added statement from Intuit.