A record-breaking multistate deal led by New York Attorney General Letitia James has been struck with tax software company Intuit that makes TurboTax.
Under the terms of the deal that Attorney General James reached with officials in all 50 U.S. states and Washington DC, Intuit agreed to pay out $141 million to millions of low-income taxpayers who thought the “Free Edition The company’s TurboTax was actually free.
Taxpayers who were made to pay for the free edition of TurboTax between 2016 and 2018 will receive $30 for each year of using the software. Fortunately, affected customers do not need to take any action on their end and will automatically be notified and receive company checks in the mail.
In a press release, Attorney General James provided additional insight into the matter and explained how the agreement will warn companies against misleading marketing, saying:
“Intuit defrauded millions of low-income Americans to prevent them from receiving the free tax filing services to which they were entitled. For years, Intuit has deceived the most vulnerable among us for profit. Today, every state in the country holds Intuit responsible for defrauding millions of taxpayers, and we’re putting millions of dollars back into the pockets of affected Americans. This agreement should remind companies large and small that engaging in these deceptive marketing schemes is illegal. New Yorkers can count on my office to protect their wallets from white collar crooks.
According to The edgethere are actually two versions of Intuit’s TurboTax software with the word “free” in their name: TurboTax Free Edition and TurboTax Free File.
Despite the fact that the company marketed the free edition of its tax software as completely free, nearly 4.4 million taxpayers ended up owing the company money after using it.
Instead of TurboTax Free Edition, these taxpayers should have used TurboTax Free File which until recently was part of the IRS Free File program which saw the US government work with tax preparation companies to provide citizens Americans a free way to file their taxes. However, Intuit discontinued the IRS Free Files program in 2021 because program limitations prevented it from innovating.
In addition to handing over $141 million, Intuit said it would stop misrepresenting its online tax preparation products, improve the information in its advertisements and marketing materials for its free products, specify in its software whether users are eligible for the free deposit and to ensure that customers do not have to start over from the beginning if they switch from a paid product to a free product.
By the edge