The tax season can be the most stressful time of year for many Americans. It might have been relieving to see TurboTax advertisements touting “free” tax-filing services. Nevertheless, the solace lasted only a short time. According to a press release from New York State Attorney General Letitia James, Intuit TurboTax has recently been criticized for allegedly deceiving low-income Americans into paying for tax services that should have been free.
TurboTax was offered in two different versions by Intuit. One, for low-income earners who can file taxes for free through the IRS Free File Program. “TurboTax Free Edition” was the name given to the second commercial product. Wording like this is mildly misleading since filing taxes is only truly “free” if Intuit deems it to be a “simple return.”.
Although, there is more to backlash than just the name of the service. Taxpayers who were in a bind were preyed on by an intensive marketing campaign launched by Intuit. In fact, TurboTax only ended up being “free” for one-third of Americans.
“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,” AG James said.
Intuit is now reimbursing about 4.4 million Americans with $141 million in restitution. Those eligible must have used TurboTax’s Free Edition from 2016 to 2018 and must have been told they had to pay even though they were eligible for free filing via IRS Free File. Over one hundred and seventy-six thousand New Yorkers will receive over $5.4 million of lump restitution.
“This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal. New Yorkers can count on my office to protect their wallets from white-collar scammers,” AG James continued.
