ATLANTA — The company behind the TurboTax filing program is paying $141 million to customers who were allegedly deceived by its services -- and more than $4 million is going to Georgians.
Georgia's Office of the Attorney General said the funds will go back to 134,000 residents in the state.
Customers across the country were deceived by misleading promises of free tax-filing services, according to the settlement. Under the terms of the suit, signed by the attorneys general of all 50 states, Intuit Inc., which owns TurboTax, will suspend the brand's "free, free, free" ad campaign and pay restitution to nearly 4.4 million taxpayers, The Associated Press reported.
"We are committed to protecting all Georgians from deceptive advertising and other fraudulent practices,” said Attorney General Chris Carr in a news release. “This type of activity will not be tolerated in our state, and we will hold any business accountable that seeks to exploit financially vulnerable consumers.”
The California-based company offered two free versions of TurboTax. One was through its participation in the Internal Revenue Service's Free File Program, which is geared toward taxpayers earning around $34,000 a year. Intuit withdrew from the IRS's program in 2021.
The company also offers its own product called "TurboTax Free Edition" that's only for customers with simple returns, as defined by Intuit. Their advertising was not clear about the pricing of their services and, according to court documents, were advertising free services and then slapping customers with a bill.
Under the agreement, Intuit will provide restitution to customers who used the advertised product TurboTax Free Edition for 2016 through 2018 and were told that they had to pay to file even though they were eligible to file under the IRS Free File program.
Customers who fall within those parameters will receive a direct payment of around $30 for each tax year. They will receive notices and checks by mail, according to the settlement.
Intuit has also agreed to reform its business practices, including:
- Refraining from making misrepresentations in connection with promoting or offering any online tax preparation products;
- Enhancing disclosures in its advertising and marketing of free products;
- Designing its products to better inform users whether they will be eligible to file their taxes for free; and
- Refraining from requiring consumers to start their tax filing over if they exit one of Intuit’s paid products to use a free product instead.
To learn more about the settlement, click here.