As millions of Americans file their 2021 income taxes online today, Intuit Sen. Elizabeth Warren (D-MA) is demanding answers about its popular e-filing product TurboTax.
In a letter to Intuit CEO Sasan K. GoodarziWarren says the company used “extensive lobbying and skillful lobbying” 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.” Rep. 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 accountants company was established in 2003 to provide free tax services to low-income applicants. Under the terms of the partnership, 2021 Enrollers with an adjusted gross income of $73,000 or less are eligible for the Services listed on the IRS website.
Intuit’s participation in the program was criticized after a series of criticisms Pro Publica reports showed that both Intuit and H&R Block had enticed taxpayers eligible for Free File into paying their taxes. The companies have also deliberately created the free versions of their software hard to find in online search results acc Pro Publica. Intuitive left the Free File program in 2021.
In the letter to Goodarzi, Sen. Warren writes that “the Free File program was a failure, tricking taxpayers into paying for services that should be free,” adding that “fraudulent practices and overt sabotage by free-file companies” are largely to blame for the low rate of taxpayer participation in the program — a rate of only about 3 percent, according to Warren’s assessment.
In response, Intuit’s Director of Corporate Communications, Derrick Plummer, provided 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 last eight years alone, Intuit’s free tax prep offering has helped nearly 100 million Americans file their taxes completely free. We are clear and fair and open and transparent with our customers about our advertising practices and our participation in the Free File Program has been in accordance with and under the supervision of the IRS. We are reviewing the letter from Sen. Warren and other policymakers and will respond.
Warren’s letter also points to a March 31st Report by OpenSecrets, which discovered that Intuit employed former government officials, including former members of Congress, for its lobbying work. According to the data, Intuit’s Corporate 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” enforcement issue, with Intuit hiring former regulators to help deflect government action. A recent court filing revealed that the company hired former FTC Chairman Jon Leibowitz “to defend itself against an FTC complaint,” which Warren says raises conflicts of interest. A 2019 Public Citizen report found that Leibowitz was one of dozens of former FTC officials with such potential revolving door conflicts.
Updated 10:07pm ET: Added statement from Intuit.
https://www.theverge.com/2022/4/18/23027618/senator-warren-taxes-turbotax-intuit-lobbying-free-file Sen. Warren is urging TurboTax for answers about its efforts to block free tax filing