TURBOTAX CUSTOMERS TO RECEIVE SETTLEMENT CHECKS:
Intuit is getting ready to pay out a $141 million settlement to compensate TurboTax customers who paid for prep services that should have been free. Consumers eligible for payment will be notified by email by the settlement fund administrator. These consumers will receive payment automatically, without needing to file a claim. Payments will be made by check, mailed throughout May 2023.
The agreement with Intuit was reached after an investigation into Intuit’s marketing, advertising, promotion, and sale of certain online tax preparation products, and whether Intuit’s conduct constituted deceptive or unfair business acts or practices that violated consumer protection laws. Intuit produces TurboTax tax filing software.
Specifically, in 2022, the Federal Trade Commission alleged that the word “free” misled consumers into believing they could file their taxes for free with TurboTax. In fact, the FTC argued in 2022, “most tax filers can’t use the company’s “free” service because it is not available to millions of taxpayers, such as those who get a 1099 form for work in the gig economy, or those who earn farm income.” The FTC found that, in 2020, approximately two-thirds of tax filers could not use TurboTax’s free product.
The settlement, which was announced last May, applies to certain consumers who paid Intuit to file their federal returns through TurboTax for tax years 2016, 2017 and 2018 but were eligible to file for free through the IRS Free File Program. A coalition of state attorneys general said that some 4.4 million consumers nationwide will receive a payment of $29 or $30 in most cases. Checks will be mailed throughout May.
Intuit offered no comment on the imminent payments, other than to refer to its 2022 statement following the settlement that said it was pleased to have reached a resolution.
The settlement fund is being administered by Rust, a third-party administrator. For more information about the settlement fund, see the Common Questions on this site. Do not contact Intuit with questions about settlement fund distribution.
