Peach Tree Times

AMERICA UNITED PAC recently issued the following announcement.

The Federal Trade Commission filed a complaint Monday accusing Intuit, the company that owns TurboTax, of deceptively advertising their paid tax preparation services as free filing. The complaint follows years of escalating tension around tax prep companies’ marketing practices and decades of lobbying against free government-sponsored tax filing services.

Intuit and other tax prep companies spend tens of millions lobbying the federal government to try to protect their paid tax prep services and steer millions more into political contributions.

Intuit, which also owns QuickBooks, Mint, Credit Karma and Mailchimp, issued a statement saying it will vigorously challenge the complaint.

The FTC complaint also comes amid increasing uncertainty about the future of the IRS Free File program after Intuit announced in 2021 that it was leaving the IRS Free-File Alliance “to focus on further innovating in ways not allowable under the current Free File guidelines.”

The IRS Free File Alliance is a private-public consortium launched by the IRS in 2003 in response to President George W. Bush administration’s proposal to create no-cost online federal tax prep as part of broader efforts to improve government technology to take advantage of the internet.

Intuit’s 2021 announcement followed H&R Block leaving the alliance in 2020. Those two companies accounted for about two-thirds of all tax returns filed through the Free File program, according to ProPublica estimates.

A December 2019 addendum to the alliance’s original memorandum of understanding prohibited tax prep companies in the alliance from blocking Free File search results. The change came shortly after ProPublica reporting claiming that tax prep companies in the alliance had steered tax filers away from Free File file options, hiding their Free File options from Google results and instead directing users to paid products – including products marketed as “free” that allegedly tricked clients into paying when they could file for free. The FTC’s new complaint echoes similar concerns about “bait-and-switch” tactics that lure filers with promises of no-cost filing only to direct them to paid products.

The alliance’s original memorandum of understanding barred the IRS from creating its own tax prep software and e-filing services but a December 2019 addendum lifted that restriction, despite tax prep companies – including Intuit – spending heavily on lobbying in an attempt to bar the government from creating its own e-filing software. 

Intuit has spent years currying influence in Washington, D.C., pouring tens of millions of dollars into lobbying spending and corporate PAC giving. 

Intuit has spent more than $41 million on lobbying since 1998 with nearly $3.3 million in 2021 and about $3.4 million in 2020, OpenSecrets’ lobbying data shows. 

The tax prep company has enlisted dozens of “revolving door” lobbyists who previously held government positions, including multiple former members of Congress. They include former Reps. Randy Forbes  (R-Va.), Charles Boustany (R-La.) and Albert Wynn (D-Md.), as well as former Sen. Tim Hutchinson (R-Ark.).

The top 2020 beneficiary of individual contributions from Intuit affiliates, which includes donors who have listed Intuit or TurboTax as their employer and their families, was President Joe Biden with more than $146,000 in contributions. 

The tax prep company’s corporate PAC, the Intuit Inc. 21st Century Leadership Fund, has given to political groups and candidates on both sides of the aisle. The Intuit corporate PAC’s biggest contributions of 2021 include $15,000 each to the Democratic Senatorial Campaign Committee and the National Republican Senatorial Committee. The corporate PAC gave another $37,500 to federal candidates in 2021 with $25,000 going to Democrats and $12,500 going to Republicans.

Intuit has given millions more in state-level political contributions with top recipients including the California Republican Party and the California Democratic Party.

H&R Block, which is not named in the FTC’s complaint, has also faced accusations of allegedly undermining the Internal Revenue Service’s Free File program.

The city of Los Angeles sued H&R Block and Intuit in 2019 on behalf of California taxpayers for allegedly directing taxpayers to their paid products and away from the free alternatives available under the program.

“H&R Block has for years defrauded the lowest earning 70 percent of American taxpayers — who are entitled under a private industry agreement with the IRS to file their taxes online for free using commercial products — by actively undermining public access to the IRS’s ‘Free File’ program, while simultaneously employing deceptive and misleading advertising and design schemes intended to induce taxpayers into unnecessarily purchasing expensive H&R Block products,” the city attorney’s complaint against H&R Block alleged.

Like Intuit, H&R Block is also a big lobbying spender. 

H&R Block has spent about $38 million on federal lobbying since 1998 with over $3.4 million in spending last year and $3.5 million in 2020. BlockPAC, H&R Block’s corporate PAC, has also given political groups and politicians across the political spectrum hundreds of thousands of dollars each election cycle. 

Original source can be found here.