More than 4 million customers in all 50 states and the District of Columbia are eligible to receive a portion of the settlement that was intended to punish the tax preparation giant for snookering millions of low-income filers into paying for what should have been free tax services. Photo by John Angelillo/UPI |
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May 5 (UPI) -- Millions of TurboTax users nationwide will soon get a small share of a $141 million settlement announced a year ago in New York as restitution for deceptive practices by the company's owner Intuit.
More than 4 million consumers in all 50 states and the District of Columbia are eligible to receive a portion of the May 2022 settlement that was intended to punish the tax preparation giant for snookering millions of low-income filers into paying for what should have been free tax services.
Intuit was not compelled to admit any wrongdoing as part of the settlement.
Some affected customers will be eligible to pocket as much as $85 in compensation, but most filers will only receive about $30.
To qualify for a cut of the money, filers will need to have used the TurboTax Free Edition between 2016 and 2018, at which time they should have been eligible to use the Intuit-sponsored IRS Free File, which was open to taxpayers who earned about $64,000 or less.
Those who meet the criteria will receive an email from an escrow administrator who will disclose the amount of each payment. From there, individuals would get a check in the mail through the end of May without having to do anything else.
An individual would get a higher payout if they used the TurboTax "free" service during all three years covered by the settlement, James noted.
The scheme first came to light in 2019 after an investigation by ProPublica revealed Intuit had used a phony ad campaign for several years to lure poor customers away from its free tax service offered through the government.
Intuit was also accused of intentionally blocking its IRS Free File landing page from search engine results during the 2019 tax season, which shut out eligible filers from free services.
The settlement forces Intuit to stop using its "free, free, free" marketing blitz that baited consumers into making the switch to the TurboTax Free Edition, according to a statement from New York Attorney General Letitia James.
"Today, every state in the nation is holding Intuit accountable for scamming millions of taxpayers, and we're putting millions of dollars back into the pockets of impacted Americans," James said Thursday.
New York alone will receive $5.4 million for more than 176,000 residents who claimed to be hoodwinked by the scheme.
In a statement, Intuit indicated a readiness to move on from the settlement, saying the company was "pleased to have reached a resolution with the state attorney general that will ensure the company can return our focus to providing vital services to American taxpayers today and in the future."
Intuit cut ties with the IRS Free File program in July 2021.
