TurboTax Returning $141 Million in Refunds, Accused of Deceiving Customers

TurboTax will soon be sending out $141 million to customers after the FTC filed suit accusing the tax prep company of deceiving "low-income tax filers into paying for tax services that should have been free."

TurboTax Lawsuit

The Federal Trade Commission filed a suit against TurboTax's parent company Intuit, accusing the company of pulling a bait and switch on millions of Americans with their “free” tax filing services.

The lawsuit argues that TurboTax tricked customers into paying for tax filing services that should have been free.

From KATC -

"According to a court filing, the IRS and Intuit formed a public-private partnership in 2002. In the agreement, Intuit would offer a version of its TurboTax software for free for low-income users.

In exchange, the IRS agreed not to compete with TurboTax by creating its own electronic tax preparation."

Between the years 2017 to 2021, Intui made their tax filing software free to those who qualified for the earned income tax credit.

The lawsuit claims that Intuit ran paid search advertisements "to direct consumers who were looking for the IRS Free File service to the TurboTax ‘freemium’ product instead." according to KATC.

Intuit is also accused of intentionally blocking its IRS Free File landing page from search engine results in 2019, which the FTC claims blocked and prevented taxpayers from filing their taxes free of charge.

Essentially, the lawsuit alleges that TurboTax advertised free tax filing services, then when it came time to actually file, customers were hit with various fees.

That's not exactly "free" is it?

Customers who used TurboTax in 2016, 2017, or 2018 will be eligible for a refund check of $29 or $30.

Eligible customers will be notified of the refund by email.

Read more at KATC.com.