TurboTax, a leading tax preparation software in America and Canada, is owned by Intuit and competes with H&R Block Tax Software and TaxAct. Developed in 1984 by Michael A. Chipman of Chipsoft, TurboTax was later acquired by Intuit in 1993.
TurboTax was first developed in 1984 by Michael A. Chipman of Chipsoft.
Intuit acquired Chipsoft, the maker of TurboTax, in 1993.
A programming error in 2001 resulted in TurboTax saving user's financial institution login credentials on Intuit servers and personal computers, posing a security risk.
Timothy Geithner used TurboTax to prepare his tax returns from 2001 to 2004, during which he encountered issues with self-employment taxes.
Intuit faced criticism for its product activation scheme in TurboTax and subsequently removed it in 2003.
The 2003 version of TurboTax used a digital rights management system that interfered with some computer boot loaders, rendering affected machines unbootable.
Timothy Geithner used TurboTax to prepare his tax returns from 2001 to 2004, during which he encountered issues with self-employment taxes.
TurboTax began offering a free version for taxpayers with an adjusted gross income of $28,500 or less ($52,000 for military personnel) through the Free File Alliance.
TurboTax limited its free filing offer to online federal tax preparation and e-filing for eligible taxpayers.
Intuit lobbied on bills in 2007 and 2011 that aimed to prevent the Treasury Department from implementing return-free filing systems.
Intuit introduced and then quickly rescinded a "Pay Per Return" policy due to criticism. The policy would have charged users for additional returns filed beyond the first one.
Between 2008 and 2012, Intuit engaged in lobbying efforts to oppose IRS initiatives for free tax filing options, particularly pre-filled returns.
TurboTax was mentioned during Timothy Geithner's confirmation hearing for Treasury Secretary. Geithner had used TurboTax but made errors in his self-employment taxes. This incident highlighted the importance of accurate data entry even when using tax software.
Intuit lobbied on bills in 2007 and 2011 that aimed to prevent the Treasury Department from implementing return-free filing systems.
As of 2012, TurboTax stopped offering direct downloads of financial data, requiring users to input their login credentials or enter data manually.
Between 2008 and 2012, Intuit engaged in lobbying efforts to oppose IRS initiatives for free tax filing options, particularly pre-filled returns.
Intuit's 2012 Form 10-K filing revealed the company's concerns about government involvement in the tax preparation market potentially threatening its business.
Intuit publicly defended its lobbying efforts, stating that it actively participates in the political process.
Intuit removed support for some IRS schedules in the interview mode of its Deluxe and Premium versions, drawing criticism from users.
Following criticism, Intuit backtracked on its decision to remove certain IRS schedules from its Deluxe and Premium versions in 2015. The company issued an apology and reinstated the schedules.
Intuit temporarily stopped transmitting state e-filed tax returns due to an increase in reports of fraudulent refund claims.
On February 22, 2015, allegations surfaced from two former Intuit security team members claiming the company knowingly allowed fraudulent tax returns to be processed to boost revenue. They asserted that Intuit disregarded their warnings and suggestions for fraud prevention. One employee reportedly filed a whistleblower complaint with the US Securities and Exchange Commission.
Journalist Dylan Matthews urged a boycott of Intuit and TurboTax in 2017 due to the company's lobbying against free tax filing options.
The French Canadian version of TurboTax, previously called ImpĂ´tRapide, was renamed to TurboImpĂ´t.
Following a new agreement with the IRS, TurboTax was prohibited from hiding its free version from search engine results. This came after reports of TurboTax using tactics to steer users away from the free version.
In 2019, a ProPublica investigation found that TurboTax was deliberately making its free version difficult to find, steering users towards paid versions even when eligible for free filing. This included misleading tactics targeting military service members.
Intuit announced its withdrawal from the Free File Alliance, citing limitations and conflicting demands.
Intuit's withdrawal from the Free File Alliance became effective.
In 2021, TurboTax faced scrutiny when some users experienced issues receiving their stimulus checks. The payments were allegedly diverted to outdated or unused customer bank accounts held by TurboTax.
On March 29, 2022, the Federal Trade Commission (FTC) announced legal action against Intuit, TurboTax's parent company, citing deceptive advertising practices related to its free tax filing products. The FTC argued that TurboTax misled customers into believing they were eligible for free filing when most were not, particularly those with farm income or gig economy earnings. Intuit countered the FTC's claims, stating their free service was available to all taxpayers.
On May 4, 2022, Intuit agreed to a $141 million settlement addressing the misleading advertising lawsuit.
In May 2023, Intuit began distributing settlement checks, ranging from $30 to $85 USD, to over 4 million customers affected by the misleading advertising practices.
In January 2024, the FTC directed Intuit to correct its misleading advertisements for its "free" tax preparation software, highlighting that most taxpayers did not qualify for the offer.
As of March 2024, Intuit discontinued its free TurboTax service.