Intuit is gearing up to pay $141 million to 4.4 million taxpayers this month as a result of a deceptive advertising lawsuit settlement reached last year.
New York Attorney General Letitia James brought the case on behalf of a coalition of attorneys general after a 2019 ProPublica report alleged Intuit, the world’s largest accounting software company and maker of TurboTax, was using deceptive tactics to entice low-income tax filers away from federally supported free services to its own service.
Intuit had been a part of the IRS Free File Program since its inception in 2003. The program lets taxpayers who make under $73,000 in adjusted gross income prepare and file their taxes online for free, but the company withdrew from the Free File Program in 2021, claiming that it could offer more benefits without the program’s limitations, according to The Verge.
“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 claimed in a statement last May after the settlement was reached, per PBS.
“This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal,” she added.
“Intuit is pleased to have reached a resolution with the state attorneys general that will ensure the company can return our focus to providing vital services to American taxpayers today and in the future,” Executive Vice President and General Counsel for Intuit Kerry McLean said.
Intuit will provide restitution to consumers who used TurboTax Free Edition for tax years 2016 through 2018 and were told they had to pay to file, despite being eligible for the free version TurboTax offered as part of the IRS Free File program, reported WFAA.
“Consumers eligible for a payment will be notified by email by the settlement fund administrator. These consumers will receive a payment automatically, without needing to file a claim,” according to the settlement website.
It is expected that most consumers will receive between $29 and $30 per year they used the TurboTax Free Edition, depending on the number of tax years they qualify for, according to the settlement’s website.
