Sen. Elizabeth Warren accuses Intuit of 'scam' by charging for tax prep software

April 18 (UPI) -- Sen. Elizabeth Warren, D-Mass., and two other U.S. lawmakers on Monday accused Intuit of hiring former regulators to defend TurboTax products that "scam American taxpayers" into paying for services that should be free.

Monday is the final day for Americans to file their taxes without requesting an extension.

In a letter sent to Intuit, the three lawmakers said they "seek to understand the extent to which Intuit has used former government officials to defend and maintain its unethical and potentially illegal practices that cost American taxpayers billions of dollars." Reps. Katie Porter and Brad Sherman, both Democrats from California, also signed the letter.

The letter noted that Intuit and other financial services in 2003 successfully lobbied the Internal Revenue Service to create the Free File program. It was intended as a consortium of private companies, including Intuit, that would provide free tax preparation services instead of providing those services directly to low- and middle-income taxpayers.

But the lawmakers in their letter called the program "a failure," asserting that it has been "scamming taxpayers into paying for services that should be free. Free File was supposed to cover 70% of American taxpayers, but as of 2018, only approximately 3% of taxpayers participated each year."

Warren tweeted on Saturday that the tax preparation lobby has prevented the Internal Revenue Service from providing free tax information to American citizens. She identified H&R Block and Intuit as two of the companies that she accused of hiding their free tax products in order to push customers into paying for the tax preparation programs.

Last month, the Federal Trade Commission sued Intuit, alleging it has deceived consumers for years by marketing its TurboTax tax filing software as free and subsequently charging most users. In that complaint, the FTC revealed that former FTC Commissioner Jon Liebowitz had served as outside counsel for Intuit.

IRS officials say that three out of four taxpayers will get a refund this year. The agency said that it issued more than 70 million refunds worth more than $222 billion between the start of the 2022 season on Jan. 24 and April 8. The agency said the average refund so far this year is $3,175, compared to $2,888 last year. So far, the IRS said it's received about 100 million returns for 2021 so far -- roughly half filed by individuals and half filed by tax professionals.