TurboTax Faces Heat For Obscured Free Version, Paid-Prep Lobbying

In the weeks following tax season, one of the nation’s leading prep platforms has faced criticism for its methods of promoting products and the paid-tax prep industry as a whole.

Last month, ProPublica reported that TurboTax’s website was directing low-income users toward the platform’s paid products even though they would have qualified for free filing.

Using details from hypothetical taxpayers, journalists tested out the TurboTax filing process multiple times, and discovered that the site was pushing certain users toward paid filing options — despite the fact that they’d earned less than $66,000, and may therefore file for free, according to an agreement between tax prep firms and the IRS.

Journalists Justin Elliott and Lucas Waldron explained that this practice seemed to be programmed into the site itself:

We took a close look at the source code of the TurboTax website and noticed something strange. Even though we clicked on the “FREE Guaranteed” option and met all the requirements to file for free, the company had tagged us as a potential paying customer.

In the source code, TurboTax had branded us as “NONFFA.” That stands for “Non Free File Alliance.” In other words, we were not on track to file for free after all.

Several days later, ProPublica reported that the free version of TurboTax was also being hidden in search engine results for the product. Elliott noted, “It turns out, Intuit, the maker of TurboTax, is deliberately hiding the truly free edition — TurboTax Free File — from Google Search. Intuit has done that by adding code on its site telling Google and other search engines not to list TurboTax Free File in search results.”

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The reporters further pointed out that the current Free File program has faced numerous problems and been criticized for having insufficient oversight or effectiveness.

But despite this — and the fact that consumer groups have frequently called for the IRS to take a hint from other nations, and create its own free, online tax prep system — Congress is currently moving to put the privately run Free File program into law as part of the bipartisan Taxpayer First Act.

“Its sponsors have argued that it doesn’t tie the IRS’ hands, but outside legal experts we’ve spoken to disagree,” Elliot and Walden wrote. ”The text in the bill codifying the Free File program has long been sought by lobbyists for Intuit.”

In response to ProPublica’s reporting, TurboTax released a statement discussing the company’s history with free federal and state tax filing, as well as its reasoning for distinguishing between two free products: TurboTax Free Edition and TurboTax Free File Program, which is part of the IRS Free File program.

Among other things, TurboTax noted,

Our intent in implementing our search practices was to make clear the distinction between these products by educating customers so they could find the product they were looking for. We did this by generating original content and publishing answers to frequently asked questions about the IRS Free File Program and the TurboTax Free File product, and optimizing that content to rank highly in organic search.

While we believe amplifying this content meaningfully informed taxpayers and contributed to IRS Free File growth, we recognize that our overall search approach may have made it harder for some customers to find a TurboTax Free File Program landing page. So we are undertaking a thorough review of our search practices to ensure we are achieving our goal of increasing eligible taxpayers’ awareness of the IRS Free File Program and its availability.

An April 28, 2019 update to ProPublica’s story about TurboTax search results reads as follows: “Intuit has changed the code on its Free File page so that the actually free version of TurboTax is no longer hidden from Google and other search engines.”

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