The tax season has ended for the year. The popular tax-filing program TurboTax, on the other hand, has been sued and will now pay $141 million to customers across the United States.
But how do you know if you qualify, and how does it differ by state?
According to Kare11, the website ran a “free, free, free” ad campaign that misled many people across the states. According to New York Attorney General Letitia James, her investigation into Intuit was prompted by a 2019 ProPublica report that found the company using deceptive tactics to steer low-income tax filers away from federally supported free services for which they qualified.
Intuit, the software company that powers TurboTax, Credit Karma, and other services, provided two free versions of TurboTax. One is for taxpayers with “simple returns,” and the other is for taxpayers earning less than $34,000 and military members.
According to Wisconsin Attorney General Josh Kaul’s office, “more than 76,000 Wisconsinites ended up paying for tax preparation products that were marketed as ‘free.'” The Department of Justice also stated that they obtained $2,370,000 from TurboTax’s owner, Intuit Inc.
Minnesota Attorney General Keith Ellison secured more than $1.8 million in refunds while visiting the Land of 10,000 Lakes. In addition, Ellison stated:
Protecting Minnesotans from predatory corporations is part of my job of assisting them in affording their lives. Because Intuit’s business practices defrauded Minnesotans, I joined this investigation and settlement. The agreement we reached will put money back into the pockets of low-income consumers who were duped into paying for tax preparation services that should have been free by Intuit.
Intuit has also agreed to change its business practices, which include:
- Refraining from making false statements in connection with the promotion or sale of any online tax preparation products;
- Increasing disclosures in its free product advertising and marketing;
- Designing its products to better inform users about their eligibility for free tax filing; and
- Refraining from requiring customers to restart their tax filing if they switch from one of Intuit’s paid products to a free product.
So, who exactly is eligible for this settlement? According to the agreement, Intuit will compensate customers who began using the commercial TurboTax Free Edition for tax years 2016 through 2018 and were told they had to pay to file despite being eligible for the version of TurboTax offered as part of the IRS Free File program.
CNET stated that no action is required. People should expect to receive a direct payment of around $30 for each year they were duped into paying for filing services. Customers will also be mailed the notice and checks.
If you’re hoping for more money from this settlement, let me try to lighten the mood with some amusing tax tweets:
If I have another child, I’ll name him or her Amazon so they won’t have to pay taxes.