If you filed through TurboTax, the company could owe you money

TurboTax maker Intuit will pay $141 million "for defrauding millions of low-income Americans into paying for tax services that should have been free." The company should also suspend its "Free, Free, Free" advertising campaign for TurboTax, which lured customers with the promise of free tax preparation and then switched them to a paid service. Read more about this publication Yahoo!.

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The company has negotiated a settlement agreement with all 50 US states and the District of Columbia. In addition, TurboTax Intuit is to reimburse nearly 4,4 million consumers who used the free version of TurboTax between 2016 and 2018 and then found they had to pay to sign up. Many did not know that they have the opportunity to file documents for free using the IRS Free File program.

"Intuit has defrauded millions of low-income Americans by depriving them of the free tax filing services they were entitled to," New York Attorney General Letitia James said. “For years, Intuit has deceived the most vulnerable among us in order to profit. Today, every state in the country holds Intuit responsible for fraudulently swindling millions of taxpayers."

A multi-state investigation found that Intuit engaged in several deceptive and unfair trading practices that limited consumer participation in the IRS Free File program. In particular, the company used the same names for both its IRS Free File product and its commercial free TurboTax product, and used search engine advertising to direct customers looking for the former to the latter. She purposefully blocked the IRS Free File landing page from search results during the 2019 tax filing season.

The company promoted the Freemium product through "free" advertising campaigns, but the TurboTax Freemium product was only free for about one-third of US taxpayers.

On the subject: US Family Having Tax Issues Because of Service Recommended by IRS

Intuit released a statement expressing no regrets and said the necessary changes to advertising would have little effect on its business. "As part of the agreement, Intuit admitted no wrongdoing, agreed to pay $141 million to close this matter, and made certain commitments to its advertising practices," the company wrote in a blog post.

Intuit withdrew from the IRS Free File Alliance in 2021, saying the exit will help it focus on "further innovation" without being burdened by the Free File program's rules.

Prior to this, the IRS introduced new free file access rules that prevent members from "engaging in any practice" that would prevent their free software from appearing on Google or any other search engine. They, among other things, had to call their applications "the IRS Free File program."

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Senator Elizabeth Warren once called the Free File Alliance "a front for tax preparers who use it as a gateway to sell expensive products that no one would even need if we just made it easy for people to pay their taxes." Other countries, including the UK and Japan, allow filing without a refund for many citizens, but Intuit, H&R Block and other companies have opposed such a move in the US.

Payments of approximately $30 per person for each tax year must be made within 30 days of signing the settlement agreement.

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