Sen. Elizabeth Warren (D-Mass.) criticized TurboTax on Monday for charging taxpayers for relatively simple tax returns and repeatedly upselling them during the filing process.
Ahead of Monday night’s tax deadline, Warren pointed to an example of a sample taxpayer with a “simple filing situation” who would qualify for the Internal Revenue Service’s (IRS) new Direct File tool, which is a free pilot program available in 12 states.
However, using TurboTax, the sample taxpayer would pay $133 for filing federal and state taxes and “get upsold or solicited for additional costly services eight more times in the process,” Warren said.
“The TurboTax website attempts to divert taxpayers away from free filing options early in the process – and continues to do so throughout their federal and state tax filings,” the Massachusetts Democrat wrote in a letter to Federal Trade Commission (FTC) Chair Lina Khan.
“Given these ongoing concerns, I support the FTC’s work and urge you to continue to take action to protect taxpayers from tax preparation companies that pile junk fees onto taxpayers,” Warren added.
The FTC ruled in January that Intuit deceived customers by claiming a version of its online tax filing software is free, when roughly 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 for all consumers or “clearly and conspicuously” disclose the percentage of consumers that 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 multi-state settlement.
