The Turbotax Scam Is Over; $3.5 Million Will Be Returned to Virginia Taxpayers!
According to a settlement agreement between the corporation and the Commonwealth, Intuit, the owner of the famous tax-filing website TurboTax, will have to pay $3.5 million to Virginia residents in response to charges of misleading advertising tactics.
TurboTax promoted its services as free to entice users in, then paid them for them, according to Attorney General Jason Miyares’ office.
After a ProPublica report claimed that the corporation used deceptive methods to divert low-income consumers away from federally backed free tax services, Virginia, along with 49 other states and the District of Columbia, started an investigation into their operations.
In a statement, Miyares added, “TurboTax took advantage of and fooled Virginians.” “I’m proud of the role my office played in securing significant relief for the Virginia taxpayers who were duped by TurboTax.
” Because bad actors who harm Virginia consumers must be held accountable, my office will continue to pursue them forcefully.”
TurboTax’s parent firm, Intuit, was required to pay $141 million in restitution to clients in every state. The administrative fund will cost around $2.5 million.
Millions of consumers around the country will receive roughly $30 for each year they were duped into paying for the services, which ran from 2016 to 2018. A cheque will be mailed to them.
TurboTax participated in the IRS Free File program, which allowed people earning $34,000 or less to file their taxes for free, according to the attorney general’s office.
The IRS promised not to build its own computerized tax preparation and filing services as part of this arrangement with TurboTax and other companies.
The company, however, advised consumers to use its “freemium” product rather than the IRS Free File Product, because the “freemium product only provided free services to about one-third of taxpayers, whereas the IRS Free File products were free to about 70% of taxpayers,” according to the attorney general’s release.
The attorney general’s office stated, “The corporation used confusingly similar names for both its IRS Free File program and its commercial ‘freemium’ offering.”
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“Intuit placed sponsored search ads to drive people looking for the IRS Free File product to the TurboTax ‘freemium’ software instead.” During the 2019 tax filing season, Intuit purposely banned its IRS Free File landing page from search engine results, effectively preventing eligible taxpayers from filing their taxes for free.
Furthermore, while TurboTax’s website promised that it would recommend the best tax solution,’ it never advertised or advocated the IRS Free File service, even when clients were disqualified for the ‘freemium’ product.”
Intuit will be required to modify its business operations as part of the settlement deal. The corporation must avoid misleading customers, acknowledge its marketing of free items, notify users when free services are available, and not compel customers to restart their tax files if they switch from a paid to a free product.