Sen. Elizabeth Warren (D-MA) is demanding answers from Intuit about its popular TurboTax e-filing product as millions of Americans file their 2021 income taxes online today.
Warren claims that the corporation has used “extensive lobbying and adroit influence peddling” to block Americans from completing their taxes for free online in a letter to Intuit CEO Sasan K. Goodarzi.
In March, Intuit was sued by the Federal Trade Commission (FTC) for fraudulent marketing, which Warren considers “good and long overdue.” The letter was also signed by Reps. Brad Sherman (D-CA) and Katie Porter (D-CA).
Many of Warren’s objections revolve around the IRS’s Free File program, which began in 2003 as a collaboration between the IRS and a nonprofit coalition of tax preparation firms to give free tax services to low-income registrants. Filers with an adjusted gross income of $73,000 or less are eligible for the services advertised on the IRS website under the terms of the partnership.
After a series of ProPublica exposes revealed that both Intuit and H&R Block had tricked Free File-eligible filers into paying to file their taxes, Intuit’s participation in the program was criticized. According to ProPublica, the corporations also purposefully made free software versions harder to find in web search results. Intuit ceased to participate in the Free File program in 2021.
Sen. Warren writes to Goodarzi that “the Free File program has been a failure, scamming taxpayers into paying for services that should be free” and that “deceptive practices and outright sabotage from Free File companies” were primarily to blame for the program’s low rate of taxpayer participation — Warren estimates it to be around 3%.
Intuit’s director of corporate communications, Derrick Plummer, responded to The Verge with the following statement:
Intuit is committed to putting Americans at the heart of their financial lives, and we are delighted to have assisted more taxpayers in filing their taxes for free than all of our competitors combined. Intuit’s free tax preparation service has helped approximately 100 million Americans file their taxes for free in the last eight years alone. We are upfront and honest with our clients, as well as open and transparent about our advertising activities, and our participation in the Free File program was carried out in accordance with IRS regulations and with the IRS’s monitoring. We are analyzing Sen. Warren’s and other policymakers’ letters and will react as soon as possible.
Intuit employed former government officials, including former members of Congress, in its lobbying activities, according to an OpenSecrets report released on March 31st. In 2021, the corporation spent $3.3 million on lobbying. Intuit’s corporate political action committee has donated to both Democrats and Republicans, according to the data.
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According to Warren’s letter, Intuit has a “revolving door” problem in enforcement, in which former regulators are hired to help dodge government action. According to a recent court filing, the corporation recruited former FTC head Jon Leibowitz “to defend itself from an FTC complaint,” raising conflict of interest concerns, according to Warren. Leibowitz was one of the dozens of former FTC officials with such possible revolving door conflicts, according to a Public Citizen analysis released in 2019.
