TurboTax leaving IRS Free File Program

Intuit, the financial software company behind TurboTax, announced Thursday that it will no longer be participating in the IRS Free File Program that allows Americans to use brand-name products to file their tax returns for free.

The company said in a blog post that while it has partnered with the IRS for the program for nearly 20 years, it was “not able to continue in the program and deliver all of the benefits that can help consumers make more money, save more, and invest for the future.” 

The software company explained that the Free File program was “surpassing its founding goals of e-file and free tax preparation,” and that it had decided to leave “due to the limitations of the Free File program and conflicting demands from those outside the program.” 

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Intuit said that its departure from the program will be effective at the end of the current tax season in October. 

“This decision will allow us to focus on further innovating in ways not allowable under the current Free File guidelines and to better serve the complete financial health of all Americans through all of our products and services, in tax preparation and beyond,” Induit said in its Thursday post. 

“We are committed to helping our customers solve their biggest financial challenges, and that means we need to focus on helping them not only get their biggest refund, but beyond tax preparation so they can increase savings, increase income, pay down debt and have faster access to their money,” Intuit explained. 

The company went on to say that it can “help more customers get access to their refund faster at no cost, to tap into expert resources at will, to choose to use their own data to better budget, save and invest – all of which we cannot effectively do as part of the Free File program.” 

The program has become the subject of increased scrutiny in recent years, especially after ProPublica reported in April 2019 that TurboTax hid its Free File page from search engines, effectively pushing users to pay for the products that would otherwise be free under the IRS program. 

The investigative report prompted the New York State Department of Financial Services to open an investigation into Intuit, as well as other tax prep companies H&R Block, TaxSlayer, TaxHawk and Drake Enterprises. 

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The state regulator announced last July that it had found the five companies had participated in “unfair and abusive practices” that undermined the ability of disadvantaged Americans to participate in the Free File program. 

“The Free File Program is broken and was exploited by commercial tax preparer companies to drive their own profits at the expense of low-income taxpayers,” Linda Lacewell, New York’s superintendent of financial services, said in a statement at the time. 

The IRS in 2019 implemented an internal review of the program and ultimately added consumer protections that it said would allow taxpayers to more easily find Free File websites and services.