Warren, Blumenthal, Sanders, Porter Probe Massive Tax Breaks Received by Intuit While Company Fights Free Tax Filing for Millions of Americans

Letter

Dear Mr. Goodarzi:
We write regarding Intuit's recent disclosure that your company received $94 million in
federal research tax credits in 2022.For years, Intuit's corporate lobbyists have argued that the
federal government should not set up a program for Americans to file their taxes online and for
free because it would be too costly for taxpayers.Your company's disclosure reveals that
Intuit's research tax break from 2022 alone could have been enough to fund a year of a free eFile program for millions of Americans.Accordingly, we request that Intuit provide a full
accounting of the research expenses underlying your massive tax breaks to better understand
whether these corporate subsidies are in the best interest of the American people.

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 of dollars
lobbying against a Direct File program run by the Internal Revenue Service (IRS).Last year,
your company was caught lying about Direct File's impact on racial inequality in tax
administration.Intuit has even gone so far as to trick low-income Americans who are eligible
for free filing services into paying for your company's products, disturbing and unethical
behavior resulting in a $141 million nationwide legal settlement with your company in 2022.
One of the centerpieces of Intuit's case against Direct File has been the specious
argument that it would be too costly for the federal government. Already straining credulity, this
claim has become even harder to take seriously in light of your company's recent disclosures.
According to the IRS's estimates, it would cost somewhere between $64 million and $249
million each year to run a free e-File program.Intuit's research tax break from 2022--which
helped drive down your company's federal tax rate to a paltry 10.5%, a lower rate than many
middle-class Americans pay on their income--exceeds the lower bound of those estimates.
In other words, with 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.

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. To that end,
we call upon Intuit--the market leader of the private tax preparation industry--to answer the
following questions about the expenses underlying your company's federal research tax breaks
by January 16, 2024:
1. How much did Intuit claim as research expenditures eligible for the federal research tax
credit under Section 41 in each of the company's fiscal years from 2018 to 2023?
2. How much did Intuit reduce its tax bill with the federal research tax credit under Section
41 in each of the company's fiscal years from 2018 to 2023?
3. How much did Intuit claim as research expenditures eligible for the federal research and
experimentation deduction under Section 174 in each of the company's fiscal years from
2018 to 2023?
4. How much did Intuit reduce its tax bill with the federal research and experimentation
deduction under Section 174 in each of the company's fiscal years from 2018 to 2023?
5. The 2017 Tax Cuts and Jobs Act championed by President Trump required most research
expenditures to be amortized over five years starting in 2022. If Congress retroactively
restored the expensing regime under Section 174--allowing companies to fully deduct
their research expenses in the same year they are incurred--how much would this
restoration retroactively reduce Intuit's taxes for the company's fiscal year 2023?
6. For each of Intuit's fiscal years from 2018 to 2023, please provide a detailed explanation
of your company's research expenses claimed under Section 41 and Section 174.
a. How much did Intuit spend on research for software improvements?
b. How much did Intuit spend on research for cybersecurity improvements?
c. How much did Intuit spend on advertising- or consumer-related research designed
to increase the sale of products such as TurboTax?
d. What other categories of claimed research expenses did Intuit undertake? How
much did Intuit spend on each category?

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.

Thank you for your attention to this important matter.

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