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TurboTax’s parent company will pay some $1.02 million to approximately 33,000 Iowans who were misled by the tax preparer, Iowa Attorney General Tom Miller’s office said Wednesday.
“As a result of a multi-state agreement, Intuit will pay $141 million in restitution to millions of consumers across the nation who were unfairly charged,” Miller’s office said in a news release.
“In addition, Intuit must suspend TurboTax’s ‘free, free, free’ ad campaign that lured customers with promises of free tax preparation services, only to deceive them into paying for services.”
All 50 states and the District of Columbia signed onto the agreement, according to the release.
Intuit will send restitution to consumers who began using TurboTax’s Free Edition for tax years 2016 through 2018 and were told they had to pay to file even though they were eligible to file free of charge using the version of TurboTax offered as part of the IRS Free File program, the release said.
Affected consumers should receive a direct payment of approximately $30 for each year they were “deceived into paying for filing services,” the Attorney General’s Office said.
Those consumers will receive notices and a check by mail, the release said.
ProPublica reported the company was using misleading tactics to steer low-income consumers toward its commercial products and away from federally supported free tax services.
Intuit purposefully blocked its IRS Free File landing page from search engine results during the 2019 tax filing season, effectively shutting out eligible taxpayers from filing their taxes for free, according to the attorneys general investigation.
TurboTax’s website displayed a “Products and Pricing” page that stated it would “recommend the right tax solution,” but never displayed or recommended the IRS Free File program, even when consumers were ineligible for the “freemium” product, the release said.