KEY POINTS
- Intuit has agreed to pay $141 million in restitution to nearly 4.4 million taxpayers
- Consumers will receive $30 for each year they paid for the service during tax years 2016 through 2018
- Intuit also agreed to suspend its 'free, free, free' advertising campaign
Intuit, the owner of the TurboTax tax-filing program, is set to pay $141 million in restitution to millions of customers across the United States who were misled by promises of a free tax-filing service, according to New York’s attorney general.
On Wednesday, the office of New York Attorney General Letitia James released an agreement wherein Intuit agreed to pay restitution to nearly 4.4 million American taxpayers. Consumers are expected to receive $30 for each year they paid for the services during tax years 2016 through 2018.
The company also agreed to suspend its “free, free, free” advertising campaign that promised customers free tax preparation but later asked them to pay for the service.
“Intuit cheated millions of low-income Americans out of free tax filing services they were entitled to,” James said in a statement. “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 she first launched an investigation into Intuit after a 2019 ProPublica report revealed that the company was using deceptive tactics to steer tax filers toward its own commercial products instead of a program that it developed in partnership with the Internal Revenue Service.
Under the terms of an agreement with the IRS, Intuit and other commercial tax preparation companies promised to provide free online filing to lower-income taxpayers. However, Intuit added code to the Free File version of TurboTax that made it difficult for would-be users to find the free version using search engines.
The company then launched a Free Edition version of TurboTax that led some customers into paying for “free” tax preparation services, some of whom paid more than $200.
Intuit later pulled out of the Free File program after the IRS changed the rules and forbade tax companies from hiding their free products from search engines.
Despite the findings of the attorney general’s office, Intuit said it admitted no wrongdoing and added that it expects minimal impact to the business from implementing the changes as stated in the agreement.
TurboTax products sit on display at Costco on January 28, 2016 in Foster City, California. Photo: Kimberly White/Getty Images for TurboTax
