KY lands $1.6M in TurboTax ‘free file’ settlement. Here’s who qualifies for a payment
State Attorney General Daniel Cameron announced Wednesday he’d secured a settlement of $1.6 million from the parent company of TurboTax for duping Kentuckians into paying for free tax services.
Kentucky’s portion is part of a broader $141 million settlement and the result of a multi-state investigation, itself spurred by a 2019 ProPublica report that documented the deceptive business practices of Intuit.
The company “unfairly charged” consumers for services they could’ve gotten for free.
So who qualifies to receive payments under the settlement, and what exactly did Intuit do?
Intuit’s deceptive business practices, explained
States across the country banded together to launch an investigation after ProPublica first brought to light Intuit’s efforts to steer low-income people toward its paid products and away from free tax prep services offered through the Internal Revenue Service.
According to a press release from Cameron’s office, Intuit duped consumers by using “confusingly similar names” for its IRS Free File product and its TurboTax Free Edition product.
Despite aggressively marketing the TurboTax Free Edition as “free, free, free,” only about one third of U.S. taxpayers actually qualified to get it at no cost. Compare that to the IRS version, which was free for 70% of taxpayers.
According to a similar announcement from Illinois attorney general’s office, Intuit used multiple means to steer filers to its commercial product and away from free alternatives. That included pulling its IRS Free File landing page from search engine results during the 2019 tax filing season and paying for ads that would push searchers to its paid version.
The TurboTax website also included a “products and pricing” page that stated it would “recommend the right tax solution” for the user. But the page never displayed nor recommended the IRS Free File program, even when consumers didn’t qualify for its “freemium” product.
Ultimately, all this landed Intuit in court, and the company opted to reform its business practices and pay out $141 million to consumers in nearly all 50 states rather than dragging things out indefinitely.
Who in Kentucky gets money from the TurboTax lawsuit?
According to Cameron’s office, Kentucky consumers included in this settlement agreement don’t have to do anything.
They can expect to receive a direct payment of roughly $30 for each year they were deceived into paying for tax filing services. Eligible consumers will automatically get notices and a check by mail.
You can read a copy of the settlement agreement here.
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