Sen. Elizabeth Warren (D-Mass.) criticized TurboTax on Monday for charging taxpayers for relatively simple tax returns and repeatedly selling them during the filing process.
Before Monday night’s tax deadline, Warren pointed to an example of a taxpayer with a “simple filing situation” who would qualify for the IRS’ new Direct File tool, which is a free pilot program available in 12 states.
However, using TurboTax, the sample taxpayer would pay $133 to file federal and state taxes and “be sold or asked for expensive additional services eight more times in the process,” Warren said.
“The TurboTax website attempts to divert taxpayers from free filing options early in the process – and continues to do so throughout their federal and state tax returns,” the Massachusetts Democrat wrote in a letter to the chairwoman of the Federal Tax Commission. Commerce (FTC), Lina Khan.
“Given these ongoing concerns, I support the work of the FTC and urge you to continue taking steps to protect taxpayers from tax preparation companies that heap unwanted fees on taxpayers,” Warren added.
The FTC ruled in January that Intuit misled customers by claiming that a version of its online tax filing software is free, when about two-thirds of American taxpayers would not qualify for free services through TurboTax.
The agency prohibited Intuit from advertising its services as “free” unless they are free to all consumers or “clearly and conspicuously” disclose the percentage of consumers who qualify for the services.
In 2022, Intuit also agreed to pay $141 million to low-income filers who paid for TurboTax services when they should have been free as part of a multistate agreement.
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