Intuit agrees to $141M settlement over allegations it improperly charged certain consumers for TurboTax

Intuit $141M settlement overview:

• Who: Intuit agreed to pay $141 million to resolve claims from a coalition of state attorneys general.

• What: The state attorneys general claim that Intuit unlawfully charged some consumers to file their federal taxes when, based on their income, they were eligible to file for free through the IRS’ Free File Program.

• Where: TurboTax customers around the country are eligible for the settlement.

UPDATE:

• This class action settlement is paying out up to $29.30.
• Congratulations to everyone who filed a claim and got paid!

Intuit agreed to a $141 million settlement with a coalition of state attorneys general to resolve claims it charged TurboTax customers for services that should have been free.

The settlement benefits consumers who paid Intuit to file their federal tax returns through TurboTax for the 2016, 2017 and/or 2018 tax years, but who should have been allowed to file their taxes for free through the IRS’ Free File Program. Around 4.4 million consumers across the country are eligible for relief under this settlement.

New York Attorney General Letitia James partnered with several other state attorneys general to investigate Intuit’s “free” TurboTax marketing. According to state authorities, Intuit deceived consumers into thinking they could file their federal taxes for free. In reality, TurboTax allegedly charged for filing their taxes — even when customers qualified for the IRS’ Free File Program. 

The IRS Free File Program allows consumers to file their federal taxes for free if their annual gross income is less than $73,000.

The $141 million settlement resolves the tax fee allegations and includes all 50 states and the District of Columbia.

“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 told CBS.

Under the terms of the settlement, eligible consumers can receive a cash payment based on the number of tax years they qualified for the IRS’ Free File Program but paid to file their taxes through TurboTax. According to the settlement website, individuals are expected to receive between $29 and $30 in payments.

No action is required to benefit from the settlement. Eligible consumers who were notified of the settlement via email will automatically receive a payment without needing to submit a claim, pay money or provide account information. 

In addition to providing payments to affected consumers, Intuit agreed to suspend TurboTax’s “free, free, free” advertisements.

The Federal Trade Commission (FTC) also took legal action against Intuit, seeking a temporary injunction to block the company from advertising its filing services as “free.” The FTC argued that, without an injunction, Intuit would “be free to continue disseminating the deceptive claim that consumers can file their taxes for free using TurboTax when, in truth, in numerous instances, [Intuit] does not permit consumers to file their taxes for free using TurboTax.” 

The injunctive relief provided from the settlement serves the same purpose as the FTC’s proposed injunction by ensuring that consumers are not misled by deceptive advertisements.

Were you charged for using TurboTax when you qualified to file for free? Let us know in the comments below.

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