Golden State Today

California Attorney General Rob Bonta has joined 22 other 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 its tax-filing products as "free" and mandated that the company halt all deceptive practices and provide clear disclosures to correct its advertising claims.

In 2022, California, along with a coalition of 51 attorneys general, announced a $141 million nationwide settlement against Intuit for similar deceptive advertising practices. The attorneys general argue in their brief that the FTC's order is lawful, well-supported by evidence, and complements rather than duplicates previous state settlements with 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."

The FTC initially brought an administrative complaint against Intuit in 2022 for falsely advertising its TurboTax products as free when they were not free for most users. Many consumers only discovered they could not file their returns for free after investing significant time and sharing sensitive personal information with TurboTax.

The amicus brief argues that the FTC’s cease-and-desist order correctly concluded that Intuit engaged in illegal misconduct by misrepresenting TurboTax as free. This conclusion aligns with principles of both state and federal consumer protection laws and underscores the dual role of states and the federal government in regulating businesses and safeguarding consumers.

Attorney General Bonta highlighted a previous multistate investigation into Intuit's practices that resulted in a $141 million settlement in May 2022. Despite 70% of taxpayers qualifying for the IRS Free File Program operated by Intuit and others, less than 3% used it to file their returns in 2020 due to tactics employed by Intuit to direct them toward paid commercial products instead. The settlement included strong injunctive terms and provided $141 million in direct consumer restitution.

The IRS Free File program allows eligible 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. During the 2024 filing season alone, Direct File saved approximately 140,000 taxpayers an estimated $5.6 million in filing costs.

Attorney General Bonta remains committed to protecting Californians' financial interests and ensuring safe tax filing processes. Last month he announced a settlement with Liberty Tax over misleading advertisements regarding free advance refunds which were actually high-cost loans. Additionally, he issued a consumer alert advising Californians on safe tax preparation practices.

Joining Attorney General Bonta in submitting this amicus brief are attorneys general from Washington D.C., 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.