Popular tax filing service TurboTax has been banned from advertising “free” services after a Federal Trade Commission ruling found the company used deceptive ad practices.
The commission says that by advertising no-cost services that most customers can’t use, the company violated the Federal Trade Commission Act of 1914 by misleading users. As a result, TurboTax can’t tout free services unless they’re free for everyone.
“The order also prohibits Intuit from misrepresenting any material facts about its products or services such as the price, refund policies or consumers’ ability to claim a tax credit or deduction or to file their taxes online accurately without using TurboTax’s paid service,” the FTC said in a statement.
However, the commission will let TurboTax advertise “nearly free” services by disclosing what percentage of customers qualify. If the service isn’t free for most customers, TurboTax must disclose that as well.
Monday’s decision ends a two-year legal battle between the FTC and TurboTax’s parent company, Intuit. The commission initially sued Intuit in 2022 over its advertising practices. FTC Administrative Law Judge D. Michael Chappell ruled on the case back last September, and the commission upheld the decision Monday.
It’s not the first time TurboTax has been accused of trying to trick customers. In 2019, a ProPublica report accused the company of manipulating web searches to steer customers away from free, federal tax filing services.
Following that report, the FTC opened an investigation that led to a massive settlement between the two parties. As a result, over 4 million TurboTax customers received payouts of up to $85.
• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.
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