COLUMBUS, Ohio — Following a recent settlement, Ohioans who were charged certain fees while using TurboTax may soon receive a payout.
Ohio Attorney General Dave Yost announced on Wednesday that the state will receive $5 million out of a total of $141 million. Intuit Inc., the parent company of the TurboTax software, agreed to pay restitution to consumers who paid for tax services that should have been free in all 50 states and the District of Columbia.
“Intuit’s scheme to make a buck by duping responsible Ohio taxpayers is abhorrent,” Yost said. “We are holding Intuit accountable and putting money back into the pockets of consumers.”
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The agreement was reached following an investigation into Intuit’s tactics of marketing its paid products as a free service. The TurboTax Free Edition, on the other hand, was only available to taxpayers with “simple returns,” as defined by Intuit.
According to a press release issued by Yost’s office:
The multistate investigation discovered that Intuit engaged in a number of deceptive and unfair trade practices that limited consumers’ participation in the IRS program, and that the company was aware of consumers’ confusion over the product names.
Furthermore, Intuit paid for paid search advertisements to direct consumers looking for the IRS Free File product to the TurboTax “freemium” product instead. During the 2018 tax season, Intuit also purposefully blocked its IRS Free File landing page from search engine results, effectively preventing eligible taxpayers from filing their taxes for free.
Furthermore, TurboTax’s website had a “Products and Pricing” page that stated it would “recommend the right tax solution,” but it never displayed or recommended the IRS Free File program.
Consumers who used the TurboTax Free Edition for tax years 2016 through 2018 and were told they had to pay despite being eligible for the IRS Free File Program will receive restitution.
The state of Ohio’s share will be distributed directly to 163,367 eligible state residents. According to Yost’s office, that equates to about $30 per Ohioan who was duped.
Consumers will be notified and a check will be mailed to them. Intuit charged eligible Ohioans about $52 per year on average to file federal returns.
As part of the settlement, Intuit agreed to reform its business practices in order to better inform users, and it agreed to withdraw from the Free File program permanently in July 2021.