Settlement funds will soon be mailed to millions of Americans who were eligible for free tax services but were tricked into paying TurboTax for their returns.
Intuit Inc., the company that owns TurboTax, was forced to pay $141 million to 4.4 million Americans as part of a settlement last year. Low-income taxpayers who qualified for free, federally sponsored tax services were affected; yet, due to “predatory and deceptive marketing,” New York Attorney General Letitia James claimed, they paid TurboTax to file their federal returns for the 2016, 2017, and 2018 tax years.
The May 2022 settlement, which James steered, was signed by all 50 states and the District of Columbia.
The New York Attorney’s General Office said on Thursday that consumers who qualify for restitution payments do not need to submit claims.
The settlement fund administrator, Rust Consulting, will send them an email to let them know, and they will instantly get a cheque in the mail.
Beginning the following week and continuing through the entire month of May, checks will be mailed. Depending on how many tax years each qualified customer qualifies for, they will receive payments ranging from $29 to $85 each.
James said in a statement on Thursday that “TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal obligations to file their taxes.”
“Today we are making amends for that error and returning funds to deserving taxpayers who ought never to have paid to file their taxes.”
At the time of the May 2022 settlement, James claimed that the ProPublica report from 2019 that revealed the company was employing dishonest practices to steer low-income tax filers away from the free, federal services they were eligible for — and toward its commercial products instead — was what initially sparked her investigation into Intuit.
“Intuit Inc. agreed to halt TurboTax’s “free, free, free” advertising campaign as part of the conditions of the settlement reached last year. Executives at Intuit were aware of the effects of advertising free services that weren’t genuinely free for everyone, according to papers obtained by ProPublica.
A PowerPoint presentation used internally by the corporation stated, according to ProPublica, “The website lists Free, Free, Free and the customers are assuming their return will be free.” “Clients are becoming irate.”
Reps for Inuit claimed that the firm “admitted no wrongdoing” in the settlement in a blog post after it was reached in 2022.
They added that Inuit “agreed to pay $141 million to put this matter behind it, and made certain commitments regarding its advertising practices.”