Intuit Inc., which owns TurboTax software, has agreed to pay $141 million to all the 50 U.S. states to bring a resolution to claims filed against the company for duping low-income Americans into paying for services for what was originally an accessible online Tax preparer as per Bloomberg News.
More on the matter
According to a statement on Wednesday by Letitia James, the New York Attorney general who led the probe on the state’s behalf, the new settlement will also ensure that Intuit suspends its advertising campaign that promised free of cost tax preparation but which ultimately led to the customers to more profitable options where they had to pay for the services.
James, in a statement, said that for years Intuit misguided the vulnerable to make a profit. Every state in the U.S. is holding Intuit Inc. responsible and accountable to taxpayers for scamming millions of dollars from them, and now the state is putting that money back into the impacted citizen’s pockets.
The general counsel of Intuit, Kerry McLean, wrote in a blog post that Intuit Inc. was fair and clean with its customers. McLean said that by resolving the matter, the company admits to no wrongdoings, and they will continue the strong partnership with governments to serve the country’s taxpayers.
James said in a statement that her office launched a probe in the matter after ProPublica, an investigative group, reported that Intuit Inc. was deploying deceptive tactics to lure low-income consumers away from a federally free tax service.
Intuit also deliberately blocked the IRS free filing landing page from the Search engine results during the tax filing season in 2019. This move effectively shut out eligible taxpayers from using the services for free.
While the settlement takes place, Intuit also faces claims from the U.S. Federal Trade Commission (FTC), which has filed a suit in which it accuses the company of luring taxpayers with free service for filing tax returns and then hiding the added costs in fine prints and directing them for paid service via hyperlinks.
A judge declined to order Intuit to stop promoting some of its free tax preparation services last month after a request from the FTC. The judge ruled in this case that the urgency to pass an order was irrelevant as the April 18 deadline to file the tax returns for the current year for most Americans was already gone.
According to Mclean, the multi-state settlement by Intuit should be able to address and resolve the FTC’s claims. She, however, said the however company was fully prepared to litigate with FTC to provide their merits in their case.
