Intuit Beats FTC In Court, Ending Restrictions On 'Free' TurboTax Ads (arstechnica.com)
- Reference: 0181089438
- News link: https://yro.slashdot.org/story/26/03/23/2334252/intuit-beats-ftc-in-court-ending-restrictions-on-free-turbotax-ads
- Source link: https://arstechnica.com/tech-policy/2026/03/intuit-beats-ftc-in-court-ending-restrictions-on-free-turbotax-ads/
> An appeals court invalidated the Biden-era Federal Trade Commission's attempt to punish Intuit for allegedly deceptive ads that pitched TurboTax as free. Under then-Chair Lina Khan, the [1]FTC determined in 2024 that the TurboTax maker violated US law with deceptive advertising and ordered it to stop telling consumers, without more obvious disclaimers, that TurboTax or other products are free. The FTC's chief administrative law judge had previously found that Intuit's ads violated prohibitions on deceptive advertising because the firm "advertised to consumers that they could file their taxes online for free using TurboTax, when in truth, for approximately two-thirds of taxpayers, the advertised claim was false."
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> Intuit appealed in the conservative-leaning US Court of Appeals for the 5th Circuit and [2]got a resounding victory on Friday in a 3-0 ruling [3]issued (PDF) by a panel of judges. "Following the Supreme Court's decision in SEC v. Jarkesy, we hold that adjudication of a deceptive advertising claim before an administrative law judge violated the constitutional separation of powers," the 5th Circuit panel said. The Supreme Court's June 2024 [4]ruling (PDF) in Securities and Exchange Commission v. Jarkesy held that the SEC system for issuing fines violated the right to a jury trial. The 5th Circuit panel said the Jarkesy decision confirms that the FTC must pursue deceptive advertising claims in courts rather than its own administrative process. [...]
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> The 5th Circuit ruling acknowledged that most people can't use TurboTax for free. "TurboTax 'Free Edition' has been part of the TurboTax range for more than a decade, available to taxpayers for what Intuit refers to as 'simple tax returns,'" the ruling said. "Most American taxpayers do not have 'simple tax returns.' The TurboTax website is designed so that any individual taxpayer can begin preparing a tax return in TurboTax Free Edition, but those who enter disqualifying information are prompted before filing to upgrade to a paid product." Although the court noted that Intuit stopped the specific ads challenged by the FTC, the ruling said the cease-and-desist order issued by the agency could have far-reaching effects on Intuit marketing. "The cease-and-desist order is remarkably broad: it prohibits Intuit for the next twenty years from advertising 'any goods or services' as free unless specific, extensive, and arguably unworkable requirements are satisfied. The order is not confined to tax-preparation solutions and extends to all products sold by Intuit," the ruling said.
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> The 5th Circuit said the FTC's deceptive advertising claims are "traditional actions at law and equity and thus involve private rights that demand adjudication in an Article III court." The court rejected the FTC's argument that the claims involve public rights that may be adjudicated by administrative agencies. "In sum, there is overwhelming evidence that Section 5 of the FTC Act did not create a new duty for merchants to refrain from deceptive advertising," the 5th Circuit said. "That duty long predated the FTC Act and could be enforced by private parties in actions at common law or equity for fraud, deceit, or unfair competition."
[1] https://news.slashdot.org/story/24/01/23/1738236/ftc-bans-turbotax-from-advertising-free-services-calls-it-deceptive
[2] https://arstechnica.com/tech-policy/2026/03/intuit-beats-ftc-in-court-ending-restrictions-on-free-turbotax-ads/
[3] https://cdn.arstechnica.net/wp-content/uploads/2026/03/intuit-5th-circuit-ruling.pdf
[4] https://www.supremecourt.gov/opinions/23pdf/22-859_1924.pdf
Summary: TurboTax is not innocent per se (Score:2)
The FTC in their own processes ruled that TurboTax claiming that their tax preparation services were "free" was deceptive in that 2/3s of people could not get the free service. The US Court of Appeals for the 5th Circuit said that procedurally the FTC had to get that ruling through the courts rather than their own administrative processes. So the claim that it was a "resounding victory" is a bit exaggerated as the "5th Circuit ruling acknowledged that most people can't use TurboTax for free. "
Re: (Score:2)
This is just another outcome that makes federal agencies more powerless to do what they were created to do. Funny how the established precedent in Atlas Roofing Co. v. OSHRC that has held for over 40 years that congress can delegate enforcement to agencies without the need for a jury became burdensome lately when it started interfering with the bottom-line for duplicitous companies.
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It is NOT what they were created to do. The agencies were not created to be judge AND jury.
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If your statement is true that means the agencies have been redundant for decades and their existence was pointless.
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> If your statement is true that means the agencies have been redundant for decades and their existence was pointless.
That seems to be the take that certain segments of the political class want people to come away with. It just depends on who among them you're talking to whether the power those agencies held should be handed to the judiciary, or the president. Congress? Heh. Even Congress doesn't care if Congress ever has any power again.
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They should be done away with. The ability for unelected bureaucrats to create and enforce law is unconstitutional. We elect legislators for that purpose and they shouldn't be able to rely on unelected bureaucracies to do their job either because the effect has been that they all throw their hands up as though they can do nothing while allowing these unelected bureaucrats who do not have to ever face the voters to act as they please.
If these agencies have recommendations they can make them to Congress li
Re: Summary: TurboTax is not innocent per se (Score:2)
"The ability for unelected bureaucrats to create and enforce law is unconstitutional."
They can not, are not, and have not been doing that. You don't know what the words you are using mean.
Re: (Score:1)
The ads for "free tax prep" have a little asterisk at the end... it's all spelled out in the EULA and TOS... Free Basic tax filing.
It becomes 'not free' when you add something (start adding Schedules, or non-standard forms or W-2s or situations.
I just feed it the info, download the PDF, mail it in with photocopies as needed of stuff.
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No, it means they can't be the cops, judge and jury. They were never supposed to be, and Congress had no authority to delegate judicial powers to the executive branch. At least that's how I see it, and it seems how the 5th circuit sees it.
Just think about it. We have an independent judiciary. If you are charged with breaking a law, you and the people who say you broke the law stand before an independent judge and a jury of your peers. Unless the FTC, SEC, or whichever federal agency says you broke a
free alternatives do exist (Score:1)
Such as freetaxusa. Search around. Turbotax is so lame and overpriced. Rant: we should just have some basic withholding percentage, tariffs, and then a similar basic flat percentage from all corporate revenue. No funny deductions, no net profit games, just revenue almost like a federal sales tax. IMHO if these were some reasonable level it'd be fine, we could then fund the rest on deficit spending (like we're so prone to do anyways.)
NOT a "Merits" decision, purely procedural (Score:1)
This is just about what venue the FTC needs to use to prosecute its case.
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Unfortunately this administration is unlikely to pursue the case further.
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Well, what we really need is for Congress to change the law so that the IRS can pre-fill your tax forms so all you have to do is make sure it's right. Do that and it won't matter what Intuit says.
Looks like meat's back on the menu, boys! (Score:2)
You're the meat, and deceptive advertising is the lure.
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No, this just means the FTC has to actually take Intuit to court, they can't decide on their own that Intuit broke the law and then issue a punishment. And I'll bet that's how you think it should be too.
Think about getting pulled over by a cop. What if when he came to your car window, he said you were guilty of breaking the law and would have to pay a fine or lose your license. No trial, no judge, no jury, just a cop deciding you broke the law and have to pay. I suspect you would be unhappy about this
Can chatgpt do taxes? (Score:2)
Seems like a fairly trivial decision tree for a modern LLM to navigate. 99% of taxes amount to half a dozen forms to fill out. Add, subtract, multiply. Annoying and time consuming for a human but there arent any nuanced decisions unless you’re a fairly large business or have a really complex investment portfolio. Those people were always gonna use pros, anyways.
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What really ticks me off is how Intuit and H&R Block lobby like crazy to keep our taxes stupid. Why the hell do I have to do the Federal government's accounting when they already have all the information and could have sent me a pre-filled form to doublecheck? Screw you Intuit, just stick with Quickbooks.
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Me, after getting out of prion for tax evasion: "ChatGPT, WTF, bro? The return to filed for me got me sent to prison!"
ChatGTP: "Whoops, you're right, man. My mistake. Let me fix that."
It is advertising! Of course it is a lie! (Score:2)
Advertising is always a lie, marinated in just enough misdirection to suggest hope that there is value for the customer.
Inuit needs to be buried as a company (Score:2)
They are like a leech on the tax system and they somehow reattach themselves each time the government trys to get them off
fine I will take my free item from an store and le (Score:2)
fine I will take my free item from an store and let the jury be the judge of if that is shoplifting or not
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Don't you mean "let the judge and jury decide"? Which, yes, is exactly what happens.