Kentucky consumers will get $1.6 million from the Turbo Tax settlement

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Taxpayers will receive $30 for each year of filing

FRANKFORT, Ky. – One of the nation’s largest tax preparation software companies has entered into a nationwide civil settlement involving the alleged violation of consumer protection laws in Kentucky and other states.

Attorney General Daniel Cameron announced Wednesday that the settlement was reached with Intuit Inc., the parent company of “Turbo Tax,” for misleading Kentucky consumers into paying for tax services that should have been free. As a result, Kentucky consumers will receive $1.6 million in compensation as part of a multi-state settlement on behalf of consumers across the country who were unfairly charged for tax preparation services.

“Intuit’s deceptive marketing practices led Kentucky consumers to pay for tax services they were eligible to receive for free,” Cameron said. “This settlement recovers more than $1.6 million for Kentuckians and forces the company to stop misrepresenting its online tax preparation products.”

An investigation into Intuit began after ProPublica reported that the company was using deceptive digital tactics to steer low-income consumers toward its commercial products and away from free federally-backed tax services. The multistate investigation found that Intuit engaged in several deceptive and unfair business practices that limited consumer participation in the IRS Free File program. The company has used confusingly similar names for its IRS Free File product and its commercial “freemium” product.

Under the agreement, Intuit will provide compensation to millions of consumers nationwide who started using the free edition of TurboTax for tax years 2016 through 2018, and have been told they had to pay to file, even though they were eligible to file for free under the IRS Free File Program.

Consumers can expect to receive a direct payment of approximately $30 for each year they were tricked into paying for deposit services. Eligible consumers will automatically receive notices and a check in the mail.

Under the settlement, Intuit also commits to reforming its business practices by:

— Suspending TurboTax’s “free, free, free” ad campaign that lured customers with promises of free tax preparation services, only to get them to pay for the services.

— Refrain from making false statements in promoting or offering online tax preparation products.

–Enhancing disclosures in its advertising and marketing of free products.

–Design its products to better inform users whether they will be eligible to file their taxes for free.

–Refrain from requiring consumers to start filing their taxes again if they switch from one of Intuit’s paid products to use a free product instead.

To view a copy of the Settlement Agreement, click here.

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