Warren, Blumenthal, Sanders, Porter Probe Massive Tax Breaks Received by Intuit While Company Fights Free Tax Filing for Millions of Americans
Despite Company’s Complaints About Direct File’s Expense, Intuit Received $94 Million in Federal Research Tax Credits in 2022, Enough to Fund a Year of Free E-Filing
“Americans deserve to know how their tax dollars are being spent, especially when their hard-earned money is being used to fund subsidies for corporations lobbying against federal programs that would benefit taxpayers.”
Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), and Bernie Sanders (I-Vt.), and U.S. Representative Katie Porter (D-Calif.) sent a letter to Intuit, requesting a full accounting of the expenses underlying the company’s massive federal research tax breaks. The lawmakers’ request follows Intuit’s recent disclosure that it received $94 million in federal research tax credits in 2022, while simultaneously spending millions lobbying against the establishment of a free program for Americans to file their taxes online. Intuit’s research tax break from 2022 alone could have been enough to fund a year of a free e-File program for millions of Americans.
“(W)ith the money that the federal government used to subsidize Intuit’s research, the IRS could have offered free, online tax filing to millions of Americans, saving taxpayers the cost and risk of putting their data in the hands of the private tax preparation industry,” wrote the lawmakers.
As the maker of TurboTax, Intuit has been one of the fiercest and most shameless opponents of free and simple tax filing for Americans. Intuit has spent millions lobbying against a Direct File program run by the Internal Revenue Service (IRS). In 2023, Intuit was caught lying about Direct File’s impact on racial inequality in tax administration. Intuit also tricked low-income Americans who are eligible for free filing services into paying for its company’s products, which resulted in a $141 million nationwide legal settlement in 2022.
“The purpose of the federal research tax credits is to spur innovation and growth for the economy as a whole, not to subsidize the profits of already dominant companies… Americans deserve to know how their tax dollars are being spent, especially when their hard-earned money is being used to fund subsidies for corporations lobbying against federal programs that would benefit taxpayers.” concluded the lawmakers.
Given these concerns, the lawmakers are asking Intuit to answer a set of detailed questions about the expenses underlying its federal research tax breaks by January 16, 2024.
Senator Warren has been at the forefront of holding tax prep companies accountable for abuses and has led the fight for a free E-File program to make tax filing simpler and more affordable for millions of Americans:
- In October 2023, Senators Warren, Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, Blumenthal, Tammy Duckworth (D-Ill.), Sanders, Sheldon Whitehouse (D-R.I.), and Representative Porter sent letters to five tax preparation companies—H&R Block, TaxAct, TaxSlayer, Ramsey Solutions, and Intuit—that recently received notices of penalty offenses from the Federal Trade Commission (FTC) regarding the misuse of taxpayer’s sensitive and confidential information.
- In July 2023, Senators Warren, Wyden, Blumenthal, Duckworth, Sanders, and Whitehouse and Representative Katie Porte released a report revealing the outrageous, extensive, and potentially illegal sharing of taxpayers’ sensitive personal and financial information with Meta by online tax preparation companies. The lawmakers also sent a letter to the IRS, the Treasury Inspector General for Tax Administration, the Federal Trade Commission, and the Department of Justice highlighting their key findings and calling on these departments to fully investigate this matter and prosecute any company or individuals who violated the law.
- In June 2023, Senators Warren and Tom Carper (D-Del.) and Representatives Brad Sherman (D-Calif.), Porter and Don Beyer (D-Va.), led a coalition of 99 Democratic lawmakers in a letter to IRS Commissioner Daniel Werfel and Deputy Treasury Secretary Adewale Adeyemo, applauding the IRS’s announcement of a pilot of a free tax filing tool next year.
- In April 2023, Senators Warren and Carper led 29 other senators in a letter to the IRS Commissioner, urging the agency to simplify the tax process and broaden access to free e-filing options.
- In April 2023, at a hearing of the Senate Finance Committee, Senator Warren questioned the IRS Commissioner about the agency’s failed Free-File partnership with private tax preparation software companies and called on the agency to implement a direct E-File program.
- In December 2022, Senators Warren and Wyden and Representatives Porter and Sherman sent letters to tax preparation companies H&R Block, TaxAct, and TaxSlayer, plus big tech firms Meta, and Google, amid reports that the tax preparation companies have been secretly transmitting individual taxpayers’ sensitive financial information to Meta and Google
- In August 2022, Senator Warren highlighted key priorities she secured in the Senate’s Inflation Reduction Act, including establishing an IRS task force to look into developing and running an IRS-run free direct E-File tax return system, based on Senator Warren’s Tax Filing Simplification Act.
- In July 2022, Senator Warren led 22 lawmakers to introduce the Tax Filing Simplification Act of 2022, legislation that would direct the IRS to develop its own free online tax preparation and filing service that would simplify the tax filing process for millions of Americans
- In June 2022, at a hearing of the Senate Finance Committee, Secretary of Treasury Janet Yellen agreed with Senator Warren on the need to create a free tax filing system that actually works for Americans.
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