Here's Who Can Get Money From The $141 Million TurboTax Settlement
People who paid for free tax services will soon be receiving checks as part of a settlement with Intuit, officials said.
You've heard a million times before, but this time the check really is in the mail.
Last year, nearly 213.4 million tax returns and other forms were filed electronically, according to the Internal Revenue Service, representing close to 81.2% of all filings.
For individual tax returns, 93.8% were filed electronically, the IRS said.
Intuit's (INTU) - Get Free Report TurboTax is one of the most popular tax programs available and was U.S & World Report's No. 1 pick for the Best Tax Software of 2023.
However, TurboTax ran into some turbulence last year and Inuit, which also makes QuickBooks, Mint, Credit Karma and Mailchimp, was ordered to pay $141 million to 4.4 million people across the country.
New York State Attorney General Letitia James said on May 4 that consumers who were tricked into paying for free tax services will begin receiving checks. Shutterstock
Cheated 'Low-Income Americans'
“TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes,” James said in a statement.
“Today we are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes," James said.
Eligible consumers include those who paid to file their federal tax returns through TurboTax for tax years 2016, 2017, and 2018, but qualified to file for free through the IRS Free File Program.
A website has been set up to provide additional information.
Most customers will get about $30, with some customers that used TurboTax for three consecutive years getting up to $85.
All 50 states and the District of Columbia signed the May 2022 settlement, which was led by James.
Intuit was also required to suspend its “free, free, free” ad campaign because it falsely lured customers with the promise of free tax preparation services, James said when the settlement was announced.
Intuit Admits 'No Wrongdoing'
Intuit said a statement that it “admitted no wrongdoing” as part of the agreement and it expects “minimal impact to its business” from the changes demanded in the future.
The investigation followed a 2019 ProPublica report that charged Intuit steered eligible clients away from federally supported tax filing products by making them difficult to find in web searches and directed them toward the paid version of the company’s filing services instead.
"A marketing concept frequently invoked at Intuit, which goes by the acronym 'FUD,' seeks to tap into Americans’ fear, uncertainty and doubt about the tax filing process," ProPublica said.
TurboTax was developed by Michael A. Chipman of Chipsoft in 1984 and was sold to Intuit in 1993.
During the company's second-quarter earnings call in February, Intuit CEO Sasan Goodarzi said "we're evolving our TurboTax brand to increase awareness that we are the best alternative in the assisted tax segment for consumers and small businesses," according to a transcript of the call.
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