![]() ![]() Intuit, based in Mountain View, California, said in a statement late Monday night that it will challenge the lawsuit. READ MORE: Expiration of child tax credits hits home This year’s tax filing deadline is April 18. The FTC has asked a federal judge to order Intuit to stop what it said were Intuit’s deceptive ads during the rush of tax season. The agency says Intuit has for years focused on the word “free” in its ads, running them during major events like the Super Bowl. “We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season.” “TurboTax is bombarding consumers with ads for ‘free’ tax filing services, and then hitting them with charges when it’s time to file,” said Samuel Levine, Director of the Bureau of Consumer Protection, in a statement. They are ineligible, the agency says, if they are gig workers or earn farm income, for example. The consumer protection agency said Tuesday that millions of consumers cannot actually use the free tax-prep software option - two-thirds of tax filers in 2020. Meanwhile, H&R Block has supported proposed legislation that would have effectively banned the IRS from offering certain tax filing services.The Federal Trade Commission is suing TurboTax maker Intuit, saying its ads for “free” tax filing misled consumers. However, as Kiplinger previously reported, in agreeing to the $144 million TurboTax settlement, Intuit did not admit wrongdoing. Intuit also recently settled a lawsuit over allegations that the company “tricked” taxpayers into paying for its tax software when they thought they were receiving a free version. In SEC filings, the company reportedly wrote, “We anticipate that governmental encroachment at both the federal and state levels may present a continued competitive threat to our business for the foreseeable future.” Intuit, the maker of TurboTax, has previously indicated that a potential IRS tax prep service could pose a business threat. Additionally, according to the report, taxpayers who were shown a “functioning internal prototype of Direct File, developed for research purposes, reported that the software exceeded their expectations in terms of ease of use and simplicity.” IRS Direct File a Threat to TurboTax and H&R Block? The IRS indicates that younger people who prepare their own tax returns might be interested in Direct File. People also worry about the tool impacting IRS audits and future tax enforcement. ![]() The agency acknowledges that taxpayers may question the IRS’ motives in offering a Direct File tool. Of course, there’s also a question of trust. IRS Service Improvements Could Bring Faster Refunds The total allocation of funds to the IRS from the IRA is $80 billion over ten years, but a recent debt ceiling agreement claws some of those funds back. ![]() The Biden administration allocated $15 million to the IRS in the Inflation Reduction Act for the agency to evaluate the feasibility of offering a free electronic tax preparation and filing service. Werfel added, “Direct File - used by numerous tax jurisdictions around the world - has long been discussed as an option for improving the customer experience for taxpayers in the U.S.” “The IRS is committed to delivering significantly improved services by providing taxpayers with tools, information, and assistance to make it easier to comply with their tax filing obligations,” Commissioner Danny Werfel said in a statement. IRS data reveal that people spend an average of about $250 to prepare their taxes.The agency says 70% of taxpayers surveyed expressed interest in a free IRS-provided tool to prepare and file taxes.According to a recent report to Congress, the IRS plans to pilot the Direct File system for the 2024 tax filing season. ![]()
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