In contrast, the TurboTax IRS Free File product was free for 70 percent of taxpayers. However, the TurboTax “freemium” product is only free for approximately one-third of US taxpayers. In some ads, the company repeated the word “free” dozens of times in as short as 30 seconds. In recent years, TurboTax has marketed this “freemium” product aggressively, including through ad campaigns where “free” is the most prominent or sometimes the only selling point. In addition, Intuit offers a commercial product called “TurboTax Free Edition,” which is only free for taxpayers with “simple returns” as defined by Intuit. In exchange for participating in the program, the IRS agreed not to compete with Intuit and other tax-prep companies by providing its own electronic tax preparation and filing services to American taxpayers. One was through its participation in the IRS Free File Program, a public-private partnership with the Internal Revenue Service (IRS), which allows taxpayers earning roughly $34,000 and members of the military to file their taxes for free. Intuit has offered two free versions of TurboTax. “It’s not right for a corporation to use deceptive tactics to profit from folks who are paying their taxes.”Īn investigation into Intuit began after ProPublica reported that the company was using deceptive digital tactics to steer low-income consumers toward its commercial products and away from federally-supported free tax services. “More than 76,000 Wisconsinites ended up paying for tax preparation products that were marketed as being ‘free,’” said Attorney General Josh Kaul.
Wisconsin will receive more than $2,370,000 for consumers who were deceived into paying to file their federal tax return. All 50 states and the District of Columbia have signed onto the agreement. In addition, Intuit must suspend TurboTax’s “free, free, free” ad campaign that lured customers with promises of free tax preparation services, only to deceive them into paying for services. As a result of a multistate agreement, Intuit will pay $141 million in restitution to millions of consumers across the nation who were unfairly charged. (Intuit), for deceiving consumers into paying for tax services that should have been free. – The Wisconsin Department of Justice secured $2,370,000 from the owner of TurboTax, Intuit Inc. You can reach him at here to contact an editor about feedback or a correction for this story.MADISON, Wis. Patrick Lavery is a reporter and anchor for New Jersey 101.5. No action needs to be taken by anyone who may be eligible for a restitution payout, which will be made directly by a fund administrator, according to the OAG. In addition to paying restitution, under the terms of the settlement, Intuit must clearly disclose that eligibility limitations apply to its "free" products, and that those may not be available to all taxpayers.
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That resulted in a loss of more than $100 million to these consumers intending to use the IRS-hosted Free File software between 20.
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The alleged deceptive practices had begun by 2016 at the latest, according to the investigation, characterized by a series of since-discontinued TV commercials featuring users repeating the words "free, free, free."Ĭustomers who searched for the no-cost, IRS-contracted program commonly found themselves on TurboTax's commercial website, on which the "Free Edition" software often led to $60 to $120 in software upgrades, OAG said. Overall, the multistate agreement is valued at $141 million, with nearly 4.5 million consumers across America eligible for repayment.
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