Skip to main content

Intuit owes you money if it tricked you into paying for TurboTax “Free Edition”

Intuit Said In Talks To Buy Mailchimp For $10 Billion-Plus
But will I have to claim that as income on my taxes?

Intuit, the company behind TurboTax, has agreed to pay out $141 million after it “cheated millions of low-income Americans out of free tax filing services,” in the words of New York Attorney General Letitia James. Most of that money will go to consumers that were tricked into paying for its service. This comes as the result of an agreement it made with the AG (and officials from all 50 states and DC), which will also require the company to change its marketing practices.

According to the Attorney General’s press release, Intuit will owe people $30 for every year they were tricked into paying for TurboTax between 2016 and 2018. The document notes that “impacted consumers will automatically receive notices and a check by mail.”

TurboTax has long been maligned for being opaque and having deceptive marketing. For years there were two versions of its tax preparation software that had “free” in the name: TurboTax Free Edition, and TurboTax Free File. Intuit, according to the AG, heavily marketed the Free Edition as being, well, free (the press release points out that some ads used the word “dozens of times in as short as 30 seconds”). But around 4.4 million people ended up owing Intuit money when using it.

What they should’ve used was the hard-to-find Free File version, which was part of the Internal Revenue Service’s Free File program. The program came from a partnership between the government and tax companies that included Intuit. It was supposed to make sure the majority of Americans would have access to a free version of tax preparation software like TurboTax. It also, as the press release notes, prevented the IRS from creating its own competing service.

Intuit stopped participating in Free File in 2021 citing “limitations” and “conflicting demands from those outside the program.” This was after the IRS changed the rules of the program, forbidding tax companies from hiding their actually free products from search engines (something Intuit and H&R Block reportedly did). The rule change also allowed the IRS to make its own free filing system, but so far it hasn’t.

Intuit’s involvement with the program has drawn scrutiny from lawmakers like Sen. Elizabeth Warren (D-MA). Last month, Warren sent a letter to the company, accusing it of “lobbying to protect its shady business practices.” The letter also said that TurboTax products “scam American taxpayers into paying for services that should be free.”

Consumers won’t be receiving the full $141 million — the AG’s press release notes that “roughly $2.5 million will be used for administrative fund costs.” Aside from agreeing to fork over the money, Intuit has also said it will:

  • Stop misrepresenting its online tax preparation products
  • Improve the disclosures in its ads and marketing for its free products
  • Make it clearer in TurboTax itself whether you’ll be eligible for free filing
  • Not make customers start over if they switch from a paid product to a free one

The points about advertising are especially interesting, because the Federal Trade Commission recently sued the company over its usage of the word “free” in a bid to “put an immediate halt to Intuit’s false advertising.” The FTC’s complaint, which was filed in March, says that there’s a hearing scheduled for the matter in September.



Source: The Verge

Popular posts from this blog

The hidden cost of food delivery

Noah Lichtenstein Contributor Share on Twitter Noah Lichtenstein is the founder and managing partner of Crossover , a diversified private technology fund backed by institutional investors, technology execs and professional athletes and entertainers. More posts by this contributor What Studying Students Teaches Us About Great Apps I’ll admit it: When it comes to food, I’m lazy. There are dozens of great dining options within a few blocks of my home, yet I still end up ordering food through delivery apps four or five times per week. With the growing coronavirus pandemic closing restaurants and consumers self-isolating, it is likely we will see a spike in food delivery much like the 20% jump China reported during the peak of its crisis. With the food delivery sector rocketing toward a projected $365 billion by the end of the decade, I’m clearly not the only one turning to delivery apps even before the pandemic hit. Thanks to technology (and VC funding) we can get a ri

Cyber Monday Canada: Last-minute deals for everyone on your list

Best Cyber Monday Canada deals: Smart Home Audio Phones, Tablets & Accessories Wearables Laptops & PC Components Amazon products Gaming Televisions Cameras Lifestyle & Kitchen Toys & Kids Cyber Monday Canada is here, and retailers are rolling out the red carpet for customers who want to shop for everything from tech to kitchenware to games and everything in between. Unlike years past, Cyber Monday Canada deals look a bit different than normal. Instead of retailers trying to pack their stores with as many shoppers as possible, we're seeing tons of online deals that you can take advantage of from the comfort of your home. We've rounded up our favorites below, so feel free to browse through the best of what Canada Cyber Monday has to offer! This list is being updated with new Cyber Monday deals all the time, so check back often. Spotlight deals It's a Switch Nintendo Switch Fortnite Edition bundle $399.95 at Amazon It's a Switch.

Slack’s new integration deal with AWS could also be about tweaking Microsoft

Slack and Amazon announced a big integration late yesterday afternoon. As part of the deal, Slack will use Amazon Chime for its call feature, while reiterating its commitment to use AWS as its preferred cloud provider to run its infrastructure. At the same time, AWS has agreed to use Slack for internal communications. Make no mistake, this is a big deal as the SaaS communications tool increases its ties with AWS, but this agreement could also be about slighting Microsoft and its rival Teams product by making a deal with a cloud rival. In the past Slack CEO Stewart Butterfield has had choice words for Microsoft saying the Redmond technology giant sees his company as an “existential threat.” Whether that’s true or not — Teams is but one piece of a huge technology company — it’s impossible not to look at the deal in this context. Aligning more deeply with AWS sends a message to Microsoft, whose Azure infrastructure services compete with AWS. Butterfield didn’t say that of course

iPhone 13 Pro vs. iPhone 15 Pro Buyer's Guide: 50+ Differences Compared

The iPhone 15 Pro brings over 50 new features and improvements to Apple's high-end smartphones compared to the iPhone 13 Pro, which was released two years prior. This buyer's guide breaks down every major difference you should be aware of between the two generations and helps you to decide whether it's worth upgrading. The ‌iPhone 13‌ Pro debuted in 2021, introducing a brighter display with ProMotion technology for refresh rates up to 120Hz, the A15 Bionic chip, a telephoto camera with 3x optical zoom, Macro photography and photographic styles, Cinematic mode for recording videos with shallow depth of field, ProRes video recording, a 1TB storage option, and five hours of additional battery life. The ‌iPhone 13‌ Pro was discontinued upon the announcement of the iPhone 14 Pro in 2022, but it is still possible to get hold of it second-hand. Our guide helps to answer the question of how to decide which of these two iPhone models is best for you and serves as a way to c