Sen. Elizabeth Warren (D-MA) is seeking answers from Intuit regarding its popular TurboTax e-filing program 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.
Intuit was sued by the Federal Trade Commission (FTC) in March 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 upon 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, which are advertised on the IRS website, under the conditions 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 involvement in the program was criticized. According to ProPublica, the corporations also purposefully made free versions of their software harder to discover 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 largely to blame for the program’s low rate of taxpayer participation — Warren estimates it to be around 3%.
Intuit hired former government officials, including former members of Congress, in its lobbying activities, according to an OpenSecrets report released on March 31st. According to the statistics, Intuit’s corporate political action committee has donated to both Democrats and Republicans. In 2021, the corporation spent $3.3 million on lobbying.
Intuit, according to Warren’s letter, has a “revolving door” problem in enforcement, in which former regulators are hired to assist dodge government action. According to a recent court filing, the corporation recruited former FTC head Jon Leibowitz “to defend itself from an FTC lawsuit,” raising conflict of interest concerns, according to Warren. Leibowitz was one of hundreds of former FTC officials with such possible revolving door conflicts, according to a Public Citizen analysis released in 2019.