Intuit Inc Agreed to Pay $141 Million over Deceptive Marketing Allegations

Intuit Inc. will pay $141 million to resolve allegations that TurboTax software tricked low-income Americans into paying taxes when they were actually eligible to file for free.

Under the settlement agreement, Intuit will send checks to nearly 4.4 million users who were affected. They will receive around $30 for each year they paid for services from 2016 to 2018. Customers who were affected automatically receive notices in the mail. 

New York Attorney General Letitia James said that her office had begun investigating Intuit after a ProPublica story reported that the company uses deceptive digital tactics to deprive low-income taxpayers of qualified free federal services and TurboTax paid services.

According to the investigation led by James, Intuit paid for online search ads that confused customers and sent anyone looking for a free filing service for the Internal Revenue Service to TurboTax's paid service.

The Federal Trade Commission also sued the company in March for misleading advertisements. The agency has asked the U.S. District Court to prevent Intuit from advertising that TurboTax users can file taxes for free, and in many cases, people are not eligible for TurboTax free filing and end up paying for services instead. Intuit said at the time that FTC's claims were unreliable.