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TurboTax to begin payouts after it ‘cheated’ customers, New York AG says


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TurboTax will begin sending checks next week to nearly 4.4 million low-income Americans whom the company deceived into paying for tax services that should have been free, New York Attorney General Letitia James said.

The checks, part of a $141 million settlement reached in May 2022 between TurboTax owner Intuit and all 50 states and the District of Columbia, are for people who were eligible to file taxes for free through an IRS partner program but were “tricked” into paying TurboTax between 2016 and 2018, James (D) said in a statement Thursday.

The company was also accused of knowingly misleading customers and blocking its landing page for its IRS Free File Program, a public-private partnership with the IRS, from showing up on search engines such as Google. Because Intuit and other companies agreed to participate in that program, the IRS agreed not to offer its own free electronic tax services. Intuit admitted no wrongdoing in the settlement.

Customers who qualify will receive between $29 and $85, depending on the number of years they paid for the services.

“TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes,” said James, who led the investigation. “Today we are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes.”

Consumers who are eligible for the payments do not need to file a claim and will be notified by email, James’s office said Thursday. Checks will be sent automatically and will be mailed throughout May.

James said last year that the settlement stemmed from a 2019 ProPublica investigation that found Intuit knowingly deceived its customers into thinking they were getting free products before charging them, sometimes through its “free, free, free” ad campaign.

When asked for comment, Intuit referred The Washington Post to its statement from May 2022, when the settlement was reached.

“As part of the agreement, Intuit admitted no wrongdoing, agreed to pay $141 million to put this matter behind it, and made certain commitments regarding its advertising practices,” the statement read.

Those commitments included suspending the “free, free, free” ad campaign. More information on who qualifies can be found on the official settlement website.

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