Company that owns TurboTax to pay back $141 million for deceptive practices

ALBANY, N.Y. (WHEC) – New York State Attorney General Letitia James has just settled with the owner of TurboTax, Intuit Inc. (Intuit), for deceiving millions of low-income Americans into paying for tax services that should have been free.

$141 million will be paid out to 4.4 million consumers who started using TurboTax’s Free Edition from 2016-2018. According to the settlement, they were told they had to pay to file even though they were eligible to file for free using the IRS Free File program.

Those customers will receive a direct payment of $30 for each year they paid for filing services. Impacted consumers (who had an income of 34K or less or are a member of the military) will automatically receive notices and a check by mail. The attorney general says 176,000 New Yorkers are affected.

As part of the settlement Intuit also has agreed to the following:

• Refraining from making misrepresentations in connection with promoting or offering any online tax preparation products;
• Enhancing disclosures in its advertising and marketing of free products;
• Designing its products to better inform users whether they will be eligible to file their taxes for free; and
• Refraining from requiring consumers to start their tax filing over if they exit one of Intuit’s paid products to use a free product instead.

Intuit withdrew from the IRS Free File program in July 2021.