Company Behind TurboTax Owes Money to 4.4M Taxpayers

Intuit reaches settlement over misleading promises of 'free' services
By Newser Editors and Wire Services
Posted May 4, 2022 2:14 PM CDT
TurboTax Company Ordered to Pay $141M to Taxpayers
A display of TurboTax software in a Sam's Club in Pittsburgh.   (AP Photo/Gene J. Puskar)

(Newser) – The company behind the TurboTax tax-filing program will pay $141 million to customers across the United States who were deceived by misleading promises of free tax-filing services, New York's attorney general announced Wednesday. Under the terms of a settlement signed by the attorneys general of all 50 states, California-based Intuit Inc. will suspend TurboTax’s "free, free, free” ad campaign and pay restitution to nearly 4.4 million taxpayers, New York Attorney General Letitia James said.

James said her investigation into Intuit was sparked by a 2019 ProPublica report that found the company was using deceptive tactics to steer low-income tax filers away from the federally supported free services for which they qualified—and toward its own commercial products instead, the AP reports. "For years, Intuit misled the most vulnerable among us to make a profit. Today, every state in the nation is holding Intuit accountable for scamming millions of taxpayers, and we’re putting millions of dollars back into the pockets of impacted Americans," James said in a statement.

Under the agreement, Intuit will provide restitution to consumers who started using the commercial TurboTax Free Edition for tax years 2016 through 2018 and were told that they had to pay to file even though they were eligible for the version of TurboTax offered as part of the IRS Free File program. Consumers are expected to receive a direct payment of approximately $30 for each year that they were deceived into paying for filing services, James said. They will automatically receive notices and checks by mail. (In March, the FTC sued Intuit over its ads for "free" TurboTax services.)

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