LITTLE ROCK, Ark. – Almost 36,000 Arkansans will share just over $1 million from a multi-state settlement of $141 million in customers who were allegedly deceived by tax software company TurboTax.
According to Arkansas Attorney General Leslie Rutledge’s office, the multi-state investigation determined that TurboTax’s parent company, Intuit, Inc. (Intuit), used deceitful practices by charging for a service that was aggressively advertised as free.
The investigation determined that Intuit used confusingly similar names for both its IRS Free File product and its commercial “freemium” product. It was also discovered that Intuit purposely blocked its IRS Free File landing page from search engine results during the 2019 tax filing season, effectively shutting out eligible taxpayers from filing their taxes for free.
All 50 states and the District of Columbia were signed into the agreement, with $1.067 million in restitution payments being designated for Arkansans.
Under the agreement, consumers are expected to receive a direct payment of approximately $30 for each year that they were deceived into paying for filing services determined to have ran between 2016 and 2018. Impacted consumers will automatically receive notices and a check by mail.
Intuit has also agreed to reform its business practices, including:
- Refraining from making misrepresentations in connection with promoting or offering any online tax preparation products;
- Enhancing disclosures in its advertising and marketing of free products;
- Designing its products to better inform users whether they will be eligible to file their taxes for free; and
- Refraining from requiring consumers to start their tax filing over if they exit one of Intuit’s paid products to use a free product instead.
Intuit withdrew from the IRS Free File program in July 2021.