Intuit, the company that owns TurboTax, is spending more money than ever on federal lobbying amid heightened scrutiny of its influence operations and revolving door lobbyists.
TurboTax’s parent company spent more than $3.5 million on federal lobbying in 2022, more than it spent in any previous year, according to a new OpenSecrets analysis.
Intuit — which also owns QuickBooks, Mint, Credit Karma and Mailchimp — has spent decades lobbying against free, government-sponsored tax filing services.
Despite the leading tax prep company’s lobbying efforts, the Inflation Reduction Act passed in 2022 allotted $15 million to the Treasury Department for the IRS to explore the creation of a free federal tax filing service. Intuit has continued to push against the concept, claiming it would be a waste of taxpayer money and a “conflict of interest” for the government to be “the investigator, auditor, enforcer, and now also the preparer.”
“Creating a government run tax preparation program would be a waste of taxpayer dollars and further disenfranchise low income taxpayers. A direct to IRS tax prep system is a multi-billion dollar solution looking for a problem,” Intuit said in a statement provided to Insider.
The tax prep company spent more than $44.8 million on federal lobbying since 1998 and its lobbying efforts have ramped up significantly in recent years. Intuit first broke $3 million in annual federal lobbying spending in 2020 with $3.4 million and spent nearly $3.3 million in 2021 before its all-time high of $3.5 million in 2022.
Intuit’s lobbying efforts have focused on tax policy, financial services and consumer products, among other issues that could affect its business. Intuit has also been active in pushing for financial regulations that would benefit the company.
While other tax prep companies also spend on lobbying, Intuit has spent the most in recent years.
In 2022, Intuit spent nearly twice as much on lobbying as its competitor, H&R Block. H&R Block was the leading tax prep lobbying spender for several years but spent just $2.6 million in 2022 after years of gradual decline from an all-time high of $4.1 million in 2018.
Intuit’s revolving door spins into the spotlight
Mounting scrutiny of TurboTax’s marketing practices and escalating tensions around government-run free filing services thrust Intuit’s history of currying influence in Washington into the spotlight in recent years.
In 2022, several members of Congress called for investigations into the company’s practice of hiring “revolving door” lobbyists who previously held government positions, citing reports by OpenSecrets and ProPublica.
After OpenSecrets’ March 2022 reporting on Intuit’s lobbying in Washington, Sen. Elizabeth Warren (D-Mass.) sent a letter to Intuit CEO Sasan K. Goodarzi accusing the company of “extensive lobbying and adroit influence peddling.”
On June 21, Warren joined Reps. Katie Porter (D-Calif.) and Brad Sherman (D-Calif.) to send another letter calling on federal inspector general offices to investigate Intuit’s “use of the revolving door to influence policy decisions” and 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.”
When asked for comment, an Intuit spokesperson directed OpenSecrets to Intuit Executive Vice President and General Counsel Kerry McLean’s May 2 letter responding to the lawmakers’ April inquiry. It emphasized that all of its revolving door hires, lobbyists or other individuals mentioned in the letter have “complied with the law and regulations as well as our own code of conduct and ethics.”
“Federal ethics laws impose a detailed regulatory framework that applies when individuals leave the government for private employment or join the government from the private sector. Intuit fully complies with this framework, including but not limited to 18 U.S.C. § 207,” McLean’s response said, noting that “the company also fully complies with all registration, reporting, and other requirements imposed by the Lobbying Disclosure Act of 1995, as amended, and those reports are publicly disclosed.”
In the June letter, lawmakers called Intuit’s response “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.” Their letter highlighted “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.”
The lawmakers also asked 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.”
Intuit is also on track to face an administrative proceeding for engaging in allegedly deceptive advertising of its TurboTax tax prep services as free filing.
In a Jan. 31 order, FTC commissioners voted to deny a motion by the agency’s Bureau of Consumer Protection seeking a summary decision against Intuit, concluding a “decision on the merits would be best made after fuller factual development at trial.”
“Because an assessment of the entire course of conduct presented here could affect determination of the appropriate remedy, summary decision on only some of the ads would not resolve the case,” the order reads, noting “ads vary by media and have evolved over time.”
source
Source: OpenSecrets.org
