How TurboTax Lobbies to Keep Taxes Confusing (and Profitable)

Every year, millions of Americans dread tax season—not just because they owe money, but because the filing process is an expensive, confusing mess. And that’s not an accident. TurboTax (owned by Intuit) has spent decades lobbying to make sure taxes stay complicated—so they can profit from it.

At Otto, we believe creatives and small business owners deserve better. So, let’s break down how TurboTax is disadvantaging everyday Americans, what they’ve done to block free and easy tax filing, and what you can do about it.

TurboTax’s Lobbying Playbook: Keep Taxes Hard, Keep Profits High

1. They Fight Against Free, Simple Tax Filing

In most developed countries, taxes are automatic—the government sends you a pre-filled return, and you either confirm it or make small corrections. No need for third-party software, no unnecessary fees.

The U.S. could easily adopt the same system, but TurboTax spends millions lobbying to prevent that from happening. Why? Because if taxes were simple, TurboTax wouldn’t be able to charge you for something that should be free.

For years, they have worked behind the scenes to block the IRS from creating a government-run filing system, ensuring that Americans remain dependent on private tax software.

2. They Deceptively Market “Free” Filing While Steering Users to Paid Versions

TurboTax technically participates in the IRS’s Free File program, which offers no-cost tax filing for low-income Americans. But here’s the catch:

• They intentionally make the free option hard to find—at one point, they even hid it from Google search results.
• Their website funnels users toward paid products, even when they qualify for the truly free version.
• They use deceptive design tactics (dark patterns) to mislead taxpayers into thinking they need to upgrade.

In 2024, the Federal Trade Commission (FTC) found that Intuit, the maker of TurboTax, used deceptive advertising techniques by promoting “free” tax preparation services that were not actually free for many consumers.

3. They Oppose IRS Direct File, a True Free Filing Alternative

After years of taxpayer advocacy, the IRS finally launched a pilot program for Direct File—a free, government-run tool that allows taxpayers to file their returns directly with the IRS, no TurboTax required.

Predictably, TurboTax hates this idea and is aggressively lobbying against it. Their argument? That the government shouldn’t “compete” with private tax preparers.

But let’s be real: the IRS offering a free filing option is not competition—it’s a basic public service. TurboTax’s opposition isn’t about fairness; it’s about protecting their $3.9 billion annual revenue at the expense of everyday taxpayers.

4. They Help Keep Tax Laws Needlessly Complicated

A simpler tax system means fewer people needing TurboTax—so the company actively fights against tax reforms that would make filing easier.

Their lobbying efforts help keep tax laws confusing so that taxpayers feel like they have no choice but to pay for professional help.

In other words, TurboTax doesn’t just profit off complexity—they help create it.

Why This Matters for Creatives and Small Business Owners

For freelancers, entrepreneurs, and small business owners, tax season is already stressful enough. TurboTax’s predatory practices make it even worse.

Instead of paying hidden fees for bloated software, creatives should have access to transparent, affordable, and genuinely helpful financial tools.

That’s why Otto exists—to give independent creators and small businesses the financial clarity they need, without the corporate tricks.

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Also Read: W-9 Form Basics: Everything You Need to Know

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How to Avoid the TurboTax Trap

Here’s how you can file taxes without falling into TurboTax’s upsell machine:

• Use the IRS Free File Tool: If you make under $73,000, you may qualify for free filing through the IRS’s official Free File program. Just make sure you go through the IRS website, not TurboTax’s misleading links.
• Check Out IRS Direct File: The IRS is rolling out a pilot program for direct filing. If it’s available to you, it’s the best way to file for free—no middlemen, no hidden fees.
• Use Otto AI for Bookkeeping & Tax Prep: Keeping your books organized all year means less stress at tax time. Otto helps creatives track their finances, so they’re ready to file without surprises.
• Stay Aware of Tax Scams: TurboTax isn’t the only company using shady tactics. Always double-check offers that seem too good to be true.

Final Thought: TurboTax Doesn’t Want You to Know This

TurboTax has spent decades lobbying against the best interests of taxpayers, making billions off of a system they work to keep broken. But you don’t have to play their game.

The more people know about TurboTax’s lobbying and deceptive tactics, the more pressure there is to create a tax system that actually works for the people—not just for corporations.

Until then, know your options, avoid the traps, and keep more of your hard-earned money.

Sources

1. ProPublica. (2019). Inside TurboTax’s 20-Year Fight to Stop Americans From Filing Their Taxes for Free. Read more
2. NPR. (2024). The FTC bars TurboTax maker Intuit from advertising ‘deceptive’ free services. Read more
3. OpenSecrets. (2023). TurboTax owner Intuit ramps up lobbying as debate over government-run free tax filing heats up. Read more

If you have any further questions or need additional information, feel free to ask!

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