In one of TurboTax’s TV commercials, a tourist shouted the word “free” and heard it echo. In another auctioneer with a cowboy hat, he rattled “freely” over and over again.

These were among a number of advertisements that repeatedly included the word “free” that Mountain View Intuit, a financial software company, launched for its TurboTax electronic filing products, including during major events such as the Super Bowl. The ads were highlighted in an agreement released today that is expected to give about 370,000 Californians about $ 30 for each year from 2016 to 2018 that they were tricked into paying for filing services that were supposed to be as says in ads, free.

“Today’s agreement holds Intuit responsible for deliberately misleading the public,” said Santa Clara County Councilor James Williams.

Williams, along with California Attorney General Rob Bonta and 50 other attorneys general, announced the agreement Wednesday that Intuit must pay $ 141 million nationwide. The agreement comes after several states and lawsuits are being investigated by the Williams office and the Los Angeles prosecutor’s office. The agreement is expected to be approved by the court soon.

TurboTax is the largest e-tax preparatory tax in the country, with about 40 million taxpayers using its online service each year, according to a press release from Bonta’s office. Intuit, a $ 127 billion company that, according to regulatory documents, has made between $ 971 million and $ 1.2 billion profit in the year covered by the agreement, he noted in an email to the news organization that he “does not acknowledge wrongdoing” but “agreed to pay $ 141 million to leave the matter behind.”

Intuit executive vice president Carrie McLean said in blog post that the company “is clear and fair to its customers, including the nearly 100 million Americans who have paid their taxes for our products for the past eight years.”

Eligible taxpayers under the settlement agreement include all individuals or submitters of joint returns who in the 2016, 2017 or 2018 tax years were eligible to use the TurboTax “Free IRS File” service, started their tax returns with the help of TurboTax “Free Edition” service, they were informed that they did not qualify for the free edition service, and then paid for a TurboTax product. To be eligible, users must not have used the IRS Free File service in a previous tax year. The beneficiaries are expected to be mostly low-income or active-duty soldiers when they applied.

Once the settlement administrator identifies those who meet the conditions, settlement notifications and checks will be sent automatically by mail, the agreement said.

According to Bonta’s office, investigators found that users were directed away from the IRS Free File service and TurboTax Free Edition. Many taxpayers using the free edition were eligible for free services, but instead were falsely told they had to pay for an upgrade costing anywhere from $ 59.99 to more than $ 200 to “complete” their filing accurately, they said. from the Bonta office. In many cases, taxpayers spend hours filling out the form before being told to pay, Bonta’s office said.

“Until Intuit ended its participation in the IRS Free File Program in 2021, TurboTax’s Products and Prices page did not list the IRS Free File as an option,” the Bonta office said. “The only way to access the product was through a complicated and non-intuitive path that started with the TurboTax support database or certain TurboTax blog posts.”

The U.S. investigation was prompted by reports in 2019 from the nonprofit newspaper ProPublica, which concluded that Intuit had been “waging a complex, sometimes covert war” for 20 years to prevent the federal government from making filing taxes easy and easy. for free. The company knew it was cheating customers, ProPublica reported, citing an internal PowerPoint presentation on analyzing customer calls. “The website lists free, free, free, and customers assume that their return will be free,” the presentation said. “Customers are upset.”

Intuit is still facing a lawsuit filed in March by the Federal Trade Commission, which we blame the company for misleading consumers through “fake advertisements representing ‘free’ tax filing”.

Mountain View’s Intuit to pay 370,000 Californians charged for ‘free’ TurboTax filing

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