Intuit To Pay $141M Settlement Over 'Free' TurboTax Ads

The company behind the TurboTax tax-filing program will pay $141 million to customers across the United States who were deceived by misleading promises of free tax-filing services, New York’s attorney general announced Wednesday, the Associated Press (AP) reported.

Photo Insert: According to documents obtained by ProPublica, Intuit executives knew they were deceiving customers by advertising free services that were not in fact free to everyone.

Under the terms of a settlement signed by the attorneys general of all 50 states, Mountain View, California-based Intuit Inc. will suspend TurboTax’s “free, free, free” ad campaign and pay restitution to nearly 4.4 million taxpayers, New York Attorney General Letitia James revealed.

James said her investigation into Intuit was sparked by a 2019 ProPublica report that found the company was using deceptive tactics to steer low-income tax filers away from the federally supported free services for which they qualified — and toward its own commercial products instead.

“For years, Intuit misled the most vulnerable among us to make a profit. 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.

“This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal.”

Intuit has offered two free versions of TurboTax. One was through its participation in the Internal Revenue Service’s Free File Program, geared toward taxpayers earning roughly $34,000 and members of the military. Intuit withdrew from the program in July 2021.

The company also offers a commercial product called “TurboTax Free Edition” that is only for taxpayers with “simple returns,” as defined by Intuit. According to documents obtained by ProPublica, Intuit executives knew they were deceiving customers by advertising free services that were not in fact free to everyone.

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