TurboTax to Pay $141M Settlement Over 'Deceiving' Millions of Low-Income Americans

The Washington Post reports: TurboTax will begin sending checks next week to nearly 4.4 million low-income Americans whom the company deceived into paying for tax services that should have been free, New York Attorney General Letitia James said.

The checks, part of a $141 million settlement reached in May 2022 between TurboTax owner Intuit and all 50 states and the District of Columbia, are for people who were eligible to file taxes for free through an IRS partner program but were "tricked" into paying TurboTax between 2016 and 2018, James (D) said in a statement Thursday.

The company was also accused of knowingly misleading customers and blocking its landing page for its IRS Free File Program, a public-private partnership with the IRS, from showing up on search engines such as Google. Because Intuit and other companies agreed to participate in that program, the IRS agreed not to offer its own free electronic tax services.

Intuit admitted no wrongdoing in the settlement.

Customers who qualify will receive between $29 and $85, depending on the number of years they paid for the services... Consumers who are eligible for the payments do not need to file a claim and will be notified by email, James's office said Thursday. Checks will be sent automatically and will be mailed throughout May.
"TurboTax's predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes," said Attorney General James. "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 described it as an effort "to stand up for ordinary Americans and hold companies who cheat consumers accountable," specifically calling out Intuit "for deceiving millions of low-income Americans into paying for tax services that should have been free."

How much did they charge?

[quonset]

Customers who qualify will receive between $29 and $85

That's all well and good, but how much did TurboTax charge these people? If it's more than what the person is to receive, then the person is not being made whole and this isn't really a penalty, is it?

Re:How much did they charge?

[alvinrod]

That's how this usually works. Large company/organization does something legally shady or outright illegal for $$$$ profit. Eventually they get sued and agree to a $$$ settlement and after the lawyers take their $$ cut, the people effected get $ back.

Re:

[TwistedGreen]

Sounds like everybody wins!

Re:

[account_deleted]

Comment removed based on user account deletion

Re:

[CoolCash]

I quit using TurboTax for this exact reason. I would have just a w2 and could file for free for federal. But if you click the wrong box, they automatically upgrade you to their "Deluxe" edition which would cost up to $90 to file. I spent hours on the phone with support trying to downgrade. Ended up making a new account.

Re:

[jetkust]

TurboTax screwed me this year. After declining to upgrade seemingly a dozen times, at the very end, they forced me to upgrade anyway with the excuse that I had to upgrade because "I sold stock". Which I didn't. I think it was like $129.

TurboTax is worthless. I have the simplest possible tax return, and they already have my info from last year, yet it takes like an hour to file the return on their website. Only to be ripped off at the last second. It's so idiotic we're forced to use these scam compan

Re:

[techno-vampire]

If your tax return is that simple, why don't you just fill out the paper form and mail it in?

Re:

[fermion]

A bipartisan coalition of the US congress voted to continue to allow these companies to steal from the U.S. population rather than allow the IRS to provide an easily developed service This is similar to the US congress restricting oversight of banks.

These settlements are not going to change anything. The amount of money here is phenomenal. Local tax preparers. Take a cut of refunds so people can get their money a few days early. The free services are purposefully obtuse to encourage people to upgrade.

Re:

[sarren1901]

Amazing how you went from bipartisan effort to allow companies to steal from the US population to it's Republican's fault. What, are the Democrats to fucking stupid to think for themselves? Both parties are clearly corrupt as can be. Republicans are probably slightly worse but it's a joke all around.

Re:

[quonset]

What, are the Democrats to fucking stupid to think for themselves?

They think enough to know proper English.

Re: How much did they charge?

[rongten]

I beg your pardon? Bernie Sanders, conservative?
Bernie bloody Sanders, the most loved politician? The most progressive senator? Bernie "17 bucks minimum wage" Sanders? From which troll farm are you? Did you fail the introductory course to trolling?

Re:

[mspohr]

I believe that the new expanded funding for the IRS that was just passed includes money for the IRS to develop its own user facing software so hopefully this scam will be put to an end.

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[kmoser]

It would be ironic if the recipients have to declare this as income and pay taxes on it.

Interesting philosophy.

[Petersko]

Punish an entity for charging for what should have been free. The U.S. Congress provides nothing recently... "nothing" should have been free, but the taxpayers are charged for it. Who gets punished?

Apologies for the incredible reach to get there... so far, in fact, that's a non sequitur and I should be punished for it. I accept my moderation with stoic aplomb.

Intuit made $10.81B gross profit last year

[ac22]

Congratulations.

https://www.macrotrends.net/st... [macrotrends.net]

ah yes

[Bahbus]

Intuit admitted no wrongdoing even though their entire company is a wrongdoing. All of their products and services are the absolute worse of the worst, useless garbage.

This is just another slap on the wrist

[ConstantineXI]

That corporations get but always ignore. Like the "free credit reports" that were nothing but ads that they wouldn't stop.

Whacky idea

[DrXym]

If a country's tax system is so fucked up that everyone needs to file returns, how about providing some decent (i.e. usable, helpful, intuitive, forgiving) free software, or a website that does it? Better yet, reform the tax system to deduct tax at source so the large majority of people don't have to file anything.

Re:Whacky idea

[sarren1901]

But then how would that allow Congress to help enrich big business? Never forget, Americans business is business!

For the birds

[TheRealMindChild]

These settlements-for-less-than-profit-made-and-admit-no-wrongdoing shit is for the birds. Why is this not only acceptable, but seemingly desired outcome for the legal system?

TurboTax is scum

[RegistrationIsDumb83]

Not only do they use your money to lobby against simpler taxes, I've also firsthand seen them bait and switch on pricing, and the biggest refund guarantee is total bunk. Fine should have been WAY bigger. Don't support this company, use FreeTaxUSA or similar.

Re:

[King_TJ]

They absolutely do suck, but my way of dealing with them is by downloading the cracked/pirated versions of their garbage software whenever I can, and using it.

I had to break down and buy the thing, retail, the year before last, because for whatever reason? Couldn't get a cracked version that actually ran properly. I figured, "Ok Intuit... you win THIS time. This payment will cover this and all the previous years I was able to use a free copy of your trash."

Really, I could happily just switch software packa