Intuit Inc agrees to pay $141 million after reaching settlement with Attorney General

HARRISBURG, Pa. — Intuit Inc. will return $141 million to customers and reform its business practices after reaching a settlement with Attorney General Josh Shapiro.

According to the Attorney General’s office, a multistate investigation discovered that Intuit Inc. was charging customers for a service it claimed was free.

Intuit Inc. is the maker of TurboTax, a service that featured a free version of online tax prep products through its participation in the IRS Free File Program. The Free File Program was the result of a public-private partnership agreement with the IRS. The agreement provided free tax filing products to the military and tax payers with an annual income of about $34,000 or less. Shapiro’s office says this service was rarely free.

“Intuit aggressively marketed a TurboTax Free Edition that in reality was hardly ever free. They bid on paid search ads to drive consumers to their ‘freemium product’ and purposefully blocked their IRS-partnered Free File landing page from search engine results during the peak of Tax Year 2018, leading to many Pennsylvanians who could have filed for free having to pay to file instead,” said Attorney General Shapiro.

The Attorney General’s office said that Intuit withdrew from the IRS Free File program in July 2021. Results of the investigation also show that Intuit’s advertisements were considered misleading and that many customers who were eligible to file their taxes for free were told that they “needed to upgrade” and asked to pay after they had already put their information into the service.

Roughly 158,000 Pennsylvanians who used TurboTax’s free edition between 2016-2018 who were told they were eligible but asked to pay will receive restitution. Consumers will receive payments of $30 for each year the payment predicament occurred.

Per the settlement, Intuit has also agreed to refrain from making misrepresentations in connection with promoting or offering any online tax prep products enhancing disclosure in its advertising and marketing of free products 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.

©2022 Cox Media Group