Intuit Settles for $141m over Misleading Ads
Hey there everyone! Some big news came out yesterday with respect to Turbo Tax. If you've used Turbo Tax in a prior year, you might be entitled to some money. Let's go through the settlement that they agreed to and what it means for you.
Details of the settlement:
- During 2016, 2017, and 2018, Turbo Tax advertised a free e-file program, but then charged users for additional forms and schedules.
- All 50 states and D.C. agreed that this was an unethical and predatory practice.
- Turbo Tax has agreed to settle for $141 million and distribute the money to all users who used the free edition during 2016, 2017, and 2018.
Alternatives to Turbo Tax:
- If you're unhappy with Turbo Tax, there are other options available.
- The IRS has made partnerships with other organizations to provide truly free e-file programs.
- Eight providers are currently available, including Free Tax USA, 1040 Now, and TaxAct.
- The IRS Free File website provides transparent information about which states are free and which ones charge fees.
Who is eligible for a refund:
- If you used Turbo Tax during 2016, 2017, and 2018 and had to pay for additional forms or schedules, you may be eligible for a refund.
- The $141 million settlement will be split among all users, so many people will receive some money.
If you've used Turbo Tax in the past, it's worth checking if you're eligible for a refund. However, if you're looking for alternatives, the IRS Free File website provides a variety of options. Always do your research and choose the option that works best for you.
$141 MILLION TurboTax Settlement | Sina Rez Law
Did you know that TurboTax, the popular tax-filing software by Intuit, misled millions of Americans by claiming to be completely free? Intuit has agreed to pay out $141 million in settlement money to affected customers. If you think you may be eligible for a refund, read on to find out what you need to know.
In 2016, Intuit directed customers away from using the IRS free file system and towards their free TurboTax software. However, many customers were later informed that their returns were not simple and they needed to pay at least $59.99 or more. This is called a bait and switch or an unfair and deceptive business practice. 4.4 million Americans, mostly with low incomes, were lured into paying for TurboTax despite being eligible to file completely for free using the IRS system.
Who Is Affected?
If you paid for TurboTax software between 2016 and 2018 despite being eligible to file for free, you may be eligible for a refund. The settlement involves all 50 states, and payments are being sent through a third-party administrator. You will receive a notification either in your email or traditional mail with more information. No action is required on your part to claim your refund.
How Much Will You Receive?
Affected customers will receive a $30 refund for each year that they used TurboTax. The large majority of the $141 million settlement is going directly to consumers.
Intuit's false claims about TurboTax being completely free have led to a $141 million settlement. If you think you may be eligible for a refund, keep an eye out for notifications in your email or traditional mail. While it's surprising that such a large corporation engaged in deceptive business practices, cases like this happen all the time. If you think you've been the victim of a similar situation, let us know in the comments.
What the Turbo Tax settlement means for consumers
Turbo Tax to Pay Restitution for Deceptive Advertising
Turbo Tax, the popular tax preparation software, has agreed to pay restitution to more than 4 million customers to settle a federal lawsuit. The company was accused of deceptive advertising by offering free tax filing services to people who did not qualify for it.
- The lawsuit alleged that Turbo Tax bombarded customers with ads for free tax filing services, but most people did not qualify for it.
- The company was accused of blocking access to the free government program that eligible customers could use.
- Turbo Tax will pay restitution to about 4 million customers in all 50 states who used its free edition.
- Customers who had to pay to file even though they qualified for the IRS's free file program will also receive restitution.
- Customers will receive a direct payment of about $30 for every year that they paid, even when they qualified to not pay.
- The settlement involves a third-party administrator to send out the direct payment.
- The company is not admitting any wrongdoing but wants to put the issue behind them.
- Turbo Tax will have to ensure that all of their marketing clearly discloses what they mean accurately, particularly when it comes to what things cost.
- The settlement speaks to the need for tax reform to provide a free, quick, and easy way for Americans to file their taxes.
- The population that is particularly vulnerable and concerned with making sure that they file may not have all of the resources that someone in a different financial situation might have.
- Americans want a free, quick, and easy way to file their taxes, especially considering the popularity of the gig economy.
- The need for transparency in advertising and marketing is crucial to prevent companies from misleading customers with false promises.
FTC sues Intuit to stop ‘bait-and-switch’ TurboTax ads
TurboTax's Parent Company Intuit Sued for Deceptive Advertising
The Federal Trade Commission (FTC) has sued Intuit, the parent company of TurboTax, for allegedly using deceptive advertising by claiming their services are free. FTC officials allege that this is not true for most users, like independent contractors and gig economy customers who file a 1099 tax form.
- The FTC is suing Intuit for deceptive advertising.
- TurboTax claims to offer free services, but most users end up getting charged.
- The lawsuit alleges that TurboTax has engaged in deceptive practices through social media, YouTube, and television.
- The disclaimer in TurboTax's advertisements is disproportionately small and hard to read.
- The free services are only available for simple US returns.
- The website section is also misleading, with warnings that threaten the user if they don't upgrade.
- Intuit denies the allegations and claims that they have helped nearly 100 million Americans file their taxes for free.
- The FTC is asking for a preliminary injunction to stop TurboTax from being used before the April 15th deadline.
The lawsuit against Intuit for deceptive advertising is a big story that has caught the attention of many taxpayers. The allegations that TurboTax's free services are not actually free for most users have raised concerns about the company's practices. While Intuit denies the allegations, the FTC is seeking a preliminary injunction to stop TurboTax from being used before the tax deadline. It remains to be seen how this lawsuit will play out and what impact it will have on the tax preparation industry.
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Free for a Fee: Intuit's TurboTax Scandal (Audio Only)
Tax preparation company Intuit has settled with all 50 states and the District of Columbia for $141 million over allegations that it misled some users of its TurboTax software. The company was accused of tricking tax filers into paying for federal tax preparation services when they were eligible for free tax preparation under a federal program. The settlement agreement requires Intuit to change how it advertises its products, communicate to filers if they are eligible to file for free, and facilitate porting over all of the data that they’ve already entered into the new service that they’re
5 Biggest Changes for Tax Year 2021 Explained - Presented By TheStreet + TurboTax
2021 has seen numerous tax changes that taxpayers need to keep track of, from COVID relief provisions to the American Rescue Plan. Lisa Greene Lewis, a CPA and TurboTax expert, shares some important information to help taxpayers navigate through these changes.
COVID Relief Provisions:
- Taxpayers who claim the standard deduction can still claim cash contributions up to $300.
- Married taxpayers filing jointly can claim cash contributions up to $600.
- Special look back provision for earned income tax credit, allowing taxpayers to use their 2019 income to qualify.
- Self-employed taxpayers impacted by COVID can claim qualified sick and family leave credits.
American Rescue Plan:
- Child tax credit increased to up to $3,600 for each child under six and $3,000 for children from 6 to 17.
- Child and dependent care credit increased up to $8,000 for two or more kids and up to $4,000 for one child.
- Third stimulus payment of $1,400 for individuals and dependents, including adult dependents.
- Recovery rebate credit available for those who didn't receive the full stimulus payment or had a baby in tax year 2021.
- IRS issuing letters (64 75) reporting correct stimulus payment amount received.
Navigating through tax changes can be confusing, but with the help of a TurboTax Live tax expert or program guidance, taxpayers can ensure they claim all the credits they are entitled to. It is important to keep documentation, including the IRS letter reporting stimulus payment amounts, to avoid any holdups with tax refunds.
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