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The states also accuse Intuit of actively attempting to steer taxpayers away from the IRS Free File program.

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When TurboTax determines a taxpayer no longer qualifies for its free product, it notifies them that they must upgrade to its paid version - called a “hard stop.” Intuit failed to disclose at these hard stops that a consumer may be eligible for IRS Free File even if they were not eligible for the TurboTax Free Edition.

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Due to its definition of “simple” tax returns, only about a third of taxpayers were eligible to file a return for free with Intuit’s TurboTax Free Edition. However, based on their income level alone, they may still be eligible to electronically file for free through the IRS.įrom 2016 to 2018, about 70 percent of taxpayers were eligible for the IRS Free File program. However, eligibility for free filing through the IRS is based solely on the taxpayer’s income, regardless of what forms or schedules the IRS requires them to complete for their return.įor example, taxpayers who made student loan payments, or performed contract work where the employer didn’t take taxes out of their pay would need to attach additional schedules to their returns, and would not be eligible to use TurboTax’s free product. Intuit defined a “simple” return as one that can be filed on a Form 1040 with no attached schedules. TurboTax based a taxpayer’s eligibility for its free product on whether they were filing a “simple” tax return.

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Ironically, Intuit also supplied the software used for the IRS’ government-sponsored free tax filing program until last year. Instead, Intuit prompted these taxpayers to pay for its premium software and continue with their return. They also accuse Intuit of failing to inform consumers when they were still eligible to file for free through the IRS Free File program, even though they were not eligible to use TurboTax’s Free Edition software. The states allege that Intuit deceptively marketed its TurboTax Free Edition by failing to adequately disclose the eligibility requirements to use its free product, which were more narrow than the standards used by the IRS.

Other states joined the investigation the following year. The Attorney General’s Office began investigating Intuit in 2019, after ProPublica published articles outlining some of Intuit’s alleged conduct. A claims administrator will reach out to impacted Washington taxpayers identified in Intuit’s records and arrange payment of the restitution they are owed.įor more information on who is eligible to electronically file their tax return for free through the IRS, go to. Washingtonians do not need to do anything to receive restitution. “Intuit’s deceptively earned profits will return to hardworking Washington families to help pay for groceries, car payments and other needs.”

“I will continue holding corporate interests accountable when they deceive Washingtonians into paying millions of dollars for a free service,” Ferguson said. In addition to the restitution to Washington taxpayers, the resolution, filed in King County Superior Court, requires the company to promptly notify consumers when they are eligible to file for free through the IRS, as well as to clearly disclose the limitations on who is eligible to use its own free tax filing software. Some Washington taxpayers are eligible for restitution for multiple years. Eligible Washington taxpayers will receive approximately $30 for each year they paid Intuit to file their returns through TurboTax. The IRS currently offers free electronic filing of all tax returns with incomes up to $73,000. These Washingtonians paid to electronically file their returns with Intuit’s TurboTax software after the company failed to inform them that they were eligible to e-file for free through the Internal Revenue Service (IRS).īetween 20, the affected Washingtonians filed more than 127,000 tax returns through Intuit’s paid software despite being eligible for free electronic filing through the IRS. SEATTLE - Attorney General Bob Ferguson announced today that as a result of his investigation tax preparation software company Intuit will return more than $3.75 million to 121,102 Washington taxpayers. More than 121,000 Washingtonians impacted by Intuit’s conduct will receive restitution payments