Senator Warren slams Intuit's 'junk fees' as America's Tax Day rolls around again

As Americans go through their annual ceremony of tax day, Senator Elizabeth Warren (D-MA) has reminded the FTC that tax software biz Intuit is making bank on "junk fees."

The FTC has been after Intuit, the operators of TurboTax, for years now, and in January finished a two-year probe and banned the tax filing system from misrepresenting itself as free. Warren applauded the move in her letter to the regulator, but said that research by her office had shown that US folks are still being misled and needlessly charged.

"Intuit continues to try to trick and trap TurboTax users into paying junk fees to file even very simple tax returns,": Warren wrote [PDF]. "Filing taxes should be free and simple. But instead, Americans spend on average of nine hours, and $150, to file their taxes, thanks to junk fees charged by Intuit and others."

This isn't the first time Intuit has been in the cross-hairs. In 2022 it agreed to pay out $141 million to settle a case brought by all 50 states claiming the tax filing software was misleading people about its so-called "free" filing services.

Warren said her staffers presented Intuit's software with a test case - filing as a single mother returning to work as a teaching aide. To file a return using TurboTax would have cost her $133, Warren asserts, when the same filing could have been done for free using the IRS' Direct File system.

"This sample taxpayer provides a concrete example of how TurboTax still appears to be ripping off taxpayers," she states. "Given Intuit’s ongoing anti-taxpayer practices, it is outrageous that the company continues to fight the FTC lawsuit and lobby against the IRS Direct File program."

• Intuit ordered to use the word 'free' less freely in its ads
• FTC sues Intuit for false advertising, says 'free' TurboTax isn't always free
• FTC presses ahead in its war on 'free' Turbo Tax
• TurboTax to pay $141m to settle claims it scammed millions of people

This year the Direct File system is being trialed in 13 states and has companies like Intuit worried. Under that scheme, the IRS works out tax returns automatically and for free, in line with tax systems in much of the developed world, and people can choose whether or not to accept the tax authority's quote or file their own return.

The inefficient complexity of the US tax system is a surprise to many immigrants to America's shores, and a major money spinner for Intuit and others. Intuit had no comment on the letter at time of publication. ®

PS: We've heard some good things about freetaxusa.com that does free federal filing and charges 15 bucks per state. It also charges for add-on features. This isn't an ad, and it may or may not be for you. Just sayin'.