June 21, 2022

Warren, Porter, Sherman Call on Inspector Generals of Treasury, IRS, FTC to Investigate Intuit’s Use of the Revolving Door to Protect Taxpayer Scams

For decades, Intuit lobbyists have defended a failed tax filing system that places corporate profits over taxpayer needs

Intuit and other tax prep companies have gotten away with these Free File scams by deploying hordes of lobbyists – including revolving door hires.

Text of Letter (pdf) 

Washington, D.C. — Today, United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Finance Committee, and Representatives Katie Porter (D-Calif.) and Brad Sherman (D-Calif.) sent a letter to Richard K. Delmar, Acting Treasury Department Inspector General, J. Russell George, Treasury Inspector General for Tax Administration, and Andrew Katsaros, Acting Inspector General at the Federal Trade Commission, regarding troubling reports of Intuit's abuse of the revolving door and the company's hiring of former federal regulators and influence-peddlers to defend its shady business practices. In the letter, the lawmakers call out Intuit for forcing American taxpayers into paying for services that should be free, and request an in-depth investigation into the company and its use of the revolving door to influence policy decisions at those agencies. 

This letter is a follow-up to a April 2022 letter that the lawmakers sent to Intuit regarding Intuit’s use of the revolving door. Intuit’s response was inadequate, failing to dispel any of the concerns about its unethical behavior or to provide information on any employee that had made a trip through the revolving door, despite the extensive reporting on specific egregious cases.

“Intuit and other tax prep companies have gotten away with these Free File scams by deploying hordes of lobbyists – including revolving door hires. Intuit has utilized its massive lobbying budget – which topped $3.2 million in 2021  – to defend its shameless profiteering, including by hiring a slew of former regulators, often deployed to lobby the very agencies where they had recently worked,” the lawmakers wrote.

Intuit lobbyists have defended a failed tax filing system that places corporate profits over taxpayer needs. In 2003, Intuit and other tax prep companies successfully lobbied the IRS to create the Free File program, through which a consortium of private companies including Intuit would provide free tax preparation services, instead of providing those services directly to low- and middle-income taxpayers itself. Since then, Free File has failed, with only 3 percent of taxpayers participating even though the program was supposed to cover 70 percent of Americans. Since 2019, reports have emerged that Intuit has hired former IRS officials to unduly influence the IRS over the years to maintain the program despite its flaws, and has now hired a former FTC Chair to defend itself from a new FTC probe.

The lawmakers request the Treasury, Tax Administration, and FTC Inspectors General mount an investigation into Intuit’s revolving-door scheme, and to examine the extent to which Intuit—and other Free File Alliance members—have used the revolving door to exert undue influence on department and agency policies, particularly Free File. It also asks the Inspectors General to assess whether the codes of conduct and ethics policies of Intuit and other Free File Alliance members are sufficient to prevent conflicts of interest and abuse of the revolving door.

Senator Warren has long fought on behalf of taxpayers to make it easier and cheaper to file their taxes, and to hold Intuit accountable for its shady business practices. She’s also been a longtime advocate for policies to address corruption and the revolving door:

  • In May 2019, Senator Warren led Senators Richard Blumenthal (D-Conn.), Edward J. Markey (D-Mass.), and Cory Booker (D-N.J.) and Representatives Sherman, Tim Ryan (D-Ohio), and Donald Beyer (D-Va.) in a letter to Intuit calling out the company for deceiving taxpayers about their tax filing options by deliberately directing them to costly profit-generating products, rather than to the Free File program.
  • In May 2019, Senator Warren sent letters to the IRS and FTC, calling for investigations into Free File members' deceptive practices and calling for the IRS to force the private tax preparation companies to refund consumers who were eligible for Free File but were steered into paid products.
  • In April 2019, Senator Warren and Senator Tammy Duckworth (D-Ill.) called on the IRS to improve the tax refund process in response to Government Accountability Office findings that showed that low-income and some minority taxpayers were more likely to use tax-time financial products in part because they are more likely to need quick access to cash to meet their financial obligations.
  • Senator Warren introduced the Anti-Corruption and Public Integrity Act that would outlaw revolving-door schemes and ensure that government officials work for the people, and not just the wealthiest corporations.