Millions of Americans who used free tax filing services have been defrauded out of millions of dollars

Intuit, the company behind TurboTax, has agreed to pay out $ 141 million after it’cheated millions of low-income Americans out of free tax filing services’. Most of that money will go to consumers that were tricked into paying for its service.

Intuit will owe people $ 30 for every year they were tricked into paying for TurboTax between 2016 and 2018. The document notes that’impacted consumers will automatically receive notices and a check by mail’.

For years there were two versions of its tax preparation software that had’free’ in the name: TurboTax free edition, and TurboTax free file. Intuit heavily marketed the free edition as being, well, free. But around 4.4 million people ended up owing Intuit money when using it.

The system was supposed to make sure the majority of Americans would have access to a free version of tax preparation software like TurboTax. It also prevented the IRS from creating its own competing service.

Intuit stopped participating in free file in 2021 citing’limitations’ and’conflicting demands from those outside the program’. This was after the IRS changed the rules of the program, forbidding tax companies from hiding their actually free products from search engines.

Intuit’s involvement with the program has drawn scrutiny from lawmakers like Sen. Elizabeth Warren (D-MA). Last month, Warren sent a letter to the company accusing it of’lobbying to protect its shady business practices’. The letter also said that TurboTax products’scam American taxpayers into paying for services that should be free’.

The AG’s press release notes that’roughly $ 2.5 million will be used for administrative fund costs’. Intuit has also said it will use the money for administrative funds.

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