SPRINGFIELD, Ill. - The company behind the TurboTax tax-filing program will pay $141 million to customers across the United States, including over 130,000 residents in Illinois, who were deceived by misleading promises of free tax-filing services.
More than $4 million in relief will be available to Illinois consumers.
Under the terms of a settlement signed by the attorneys general of all 50 states, Mountain View, California-based Intuit Inc. will suspend TurboTax’s "free, free, free" ad campaign and pay restitution to nearly 4.4 million taxpayers.
"Intuit attracted customers to TurboTax with promises of free tax preparation services, leaving people to learn the hard way that those services were anything but free," said Illinois Attorney General Kwame Raoul. "This settlement holds Intuit accountable for intentionally deceiving taxpayers who were simply seeking an affordable option to help them navigate what can be the daunting process of filing their taxes."
Intuit has offered two free versions of TurboTax. One was through its participation in the Internal Revenue Service's Free File Program, geared toward taxpayers earning roughly $34,000 and members of the military. The company also offers a commercial product called "TurboTax Free Edition" that is only for taxpayers with "simple returns," as defined by Intuit.
Intuit will provide restitution to consumers who started using TurboTax's Free Edition for tax years 2016 through 2018, and were told that they had to pay to file even though they were eligible to file for free.
Consumers are expected a direct payment of about $30 for each year that they were deceived into paying for filing services. They will receive notices and a check by mail.
Intuit has also agreed to the following:
- 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.
- 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.
Intuit withdrew from the IRS Free File program in July 2021.
The Associated Press contributed to this report.