California Attorney General Rob Bonta has joined 22 attorneys general in filing an amicus brief supporting the Federal Trade Commission's (FTC) cease-and-desist order against Intuit, the maker of TurboTax. The FTC determined that Intuit deceptively advertised "free" tax-filing products and ordered the company to halt deceptive activities and provide disclosures to address the claims in its advertisements.
In 2022, California, along with a coalition of 51 attorneys general, announced a $141 million nationwide settlement against Intuit for similar findings of illegal deceptive advertising. In their brief, the attorneys general argue that the FTC's order is lawful, supported by ample evidence, and complements rather than duplicates states’ prior settlements against Intuit.
"Every tax season, hardworking Californians put their trust in online tax filing services like TurboTax, which promise to find taxpayers the best deals," said Attorney General Bonta. "FTC’s investigation, like our 2022 multistate investigation, found that Intuit repeatedly and deliberately broke that promise. I support FTC's parallel enforcement authority — protecting consumers from deceptive business schemes requires everyone at the table, both states and the federal government."
In 2022, the FTC brought an administrative complaint against Intuit for deceptively advertising its supposedly “free” TurboTax products. These were not free for most users. The advertisements consistently conveyed that consumers could file a tax return with TurboTax for free; however, disclaimers were insufficient to counteract this message. Many consumers only realized they could not file for free after investing significant time and sharing sensitive personal information.
The amicus brief argues that the FTC’s cease-and-desist order rightly concluded — consistent with states’ prior investigations — that Intuit engaged in illegal misconduct by depicting TurboTax as free when it was not free for most consumers. The order aligns with longstanding principles of both state and federal consumer protection law and supports the dual role of states and federal government in policing unscrupulous businesses.
The FTC allegations align with findings from a multistate investigation of Intuit settled in May 2022. As part of a coalition including 51 attorneys general and officials from Los Angeles City and Santa Clara County, Attorney General Bonta announced a $141 million settlement resolving allegations that Intuit deceptively advertised its “free” online TurboTax products. Despite 70% of taxpayers qualifying for the “IRS Free File Program,” less than 3% used it in 2020 due to tactics steering them toward paid commercial products. The settlement included strong injunctive terms and $141 million in direct consumer restitution, with $11.4 million going to approximately 370,000 eligible Californians who were deceived into paying to file their federal tax returns.
IRS Free File allows qualified taxpayers to prepare and file federal income tax returns online using guided software. In May 2024, the IRS made Direct File—a program enabling taxpayers to file directly with the IRS for free—a permanent option. This program saved some 140,000 taxpayers an estimated $5.6 million during the 2024 filing season.
Attorney General Bonta remains committed to Californians' financial protection and safe tax filing practices. Last month, he announced a settlement with Liberty Tax over deceptive advertisements misleading consumers about receiving a free advance on their tax refund when it was actually a high-cost loan. In March, he issued a consumer alert offering tips on safe tax preparation and advising early filing while promoting awareness of free or low-cost options.
In submitting the amicus brief, Attorney General Bonta joins attorneys general from District of Columbia, Illinois, Arizona, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland Massachusetts Michigan Minnesota Nevada New Jersey New York North Carolina Oregon Pennsylvania Rhode Island Washington Wisconsin.
A copy of the letter can be found here.
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