Intuit To Pay $141 Million To Millions Of Customers For Its ‘Free To File’ Bullshit
from the death-and-taxes dept
We have a whole series of posts going back several years about Intuit, maker of TurboTax software, and its bullshit and misleading practices for fooling the public into thinking they can file taxes for free under the government’s free-to-file program only to deceptively convince them to pay for services instead. The highlights are that the company has people go through the full tax prepwork after luring them in with promises of free services only to claim they don’t qualify for free filing, and that the company does everything it can to actually hide the options for free filing, and then siphons fees from low-income taxpayers and military veterans. Just great people all around.
The FTC sued Intuit over all of this recently. In what appears to be an unrelated suit spearheaded by NY Attorney General Letitia James, Intuit has also just settled with all 50 states for $141 million over its deceptive practices.
The settlement, announced Wednesday by New York Attorney General Letitia James, said about 4.4 million customers were “unfairly charged.” Intuit must also suspend its “free, free, free” ad campaign because it falsely lured customers with the promise of free tax preparation services, the statement added.
As is typical in these sorts of settlements, Intuit was not forced to admit any wrongdoing. But that didn’t mean that Intuit itself had to put out a statement reiterating that fact before adding that the company does not expect this settlement to impact its current business at all. It almost seems like Intuit has decided that paying out this settlement is no big deal. Or, perhaps, even worth it.
Each user impacted by the settlement will be mailed a check of $30 for each year they were negatively impacted by Intuit “doing nothing wrong.” And, while Intuit has stated that no wrongdoing is admitted here, AG James is singing a different tune.
“Intuit cheated millions of low-income Americans out of free tax filing services they were entitled to,” James wrote in a press release. “For years, Intuit misled the most vulnerable among us to make a profit. Today, every state in the nation is holding Intuit accountable for scamming millions of taxpayers, and we’re putting millions of dollars back into the pockets of impacted Americans.”
Will this get Intuit to permanently change its ways and no longer try to bilk money out of an unsuspecting public? Naaaaaaah, probably not. We’ll have to see now what the FTC gets done with its own lawsuit.
Filed Under: deceptive advertising, free tax filing, ftc, letitia james, turbotax
Companies: intuit
Comments on “Intuit To Pay $141 Million To Millions Of Customers For Its ‘Free To File’ Bullshit”
The irony.
What’s the betting that this company creating software to make paying taxes easier is now gonna have trouble paying its income tax next year?
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Pretty much zero. According to a quick glance at their Wikipedia page, Intuit had a net income of $2.062 billion in 2021. So, even assuming that they’re not using all the tricks that other companies use to effectively reduce their effective tax to nothing (which would be strange considering their business), they’ve suffered an increase of somewhere in the region of 7% of a single year’s net income. They’ll be fine.
There might be a question of how much that income was due to people falling for the scheme they’ve been fined over and how much lower their 2022 income will be as a result, but nobody’s going to crying to the IRS about how they don’t have the spare cash to pay their taxes any time soon.
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Through the use of tax loopholes, I’ll bet Intuit don’t pay much in tax anyways, and if they’re allowed to declare this award as deductible…
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It works out to about a 20c coupon for each person.
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Huh.
Where did you get 20c from?
Re: WRITE OFF
Wow, now for another tax deduction..
Or do they Pay taxes? That had a thing going with the IRS to Give access to Tax payers for free service. HOW much was the IRS paying for each?
What ever happened to Inconvenience? Interest rates on that money? How about missing paying other bills cause they had to pay for taxes?
Odds say they will get to Subtract handling and mailing fees.
For years, corporations misled the most vulnerable among us to make a profit.
LMFTFY
Good in theory, but...
If a fine/settlement isn’t at a minimum 100% of what they made from the con that’s not a penalty, it’s a cost of doing business little different from paying for electricity or building maintenance.
Given we’re talking about something they’ve apparently been doing for years affecting millions of people I’d be surprised if that amount even equaled a noticeable fraction of what they got from the scam. Paired with no admission of guilt Intuit is probably honestly thrilled with this result.
I’ve used TurboTax Free edition for a decade and more, and there was never any “misleading” pushing toward fee services before this tax season–the first since Intuit leaving the IRS Free File program. Still, being familiar with the product, it wasn’t hard to avoid paying any fees. I can’t help but think a lot of these complaints came from some really dumb users. It’s still pitiful, though, that the IRS can’t go ahead and just make paying income taxes more automatic.
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Whereas I can’t help but think a lot of these complaints came from users who were used to the product, weren’t warned that the 100% free program was coming to an end, and certainly weren’t given a clear option between paid and free. Not everyone’s lucky enough to be as tech savvy as you claim to be, so there’s no need to describe those who aren’t as ‘dumb’.
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Can’t they? Wikipedia says:
“In 2003, the IRS struck a deal with tax software vendors: The IRS would not develop online filing software and, in return, software vendors would provide free e-filing to most Americans.”
It seems entirely fair for the IRS to now declare that deal void. And they’re already got software to calculate taxes for all Americans. Make a mathematical error on your taxes and you’ll see that (they’ll fix the error and tell you the updated total).
So it seems to me that they could do it, and they’re just choosing not to.
Re: Re: 4.4 million?
That number is very small.
And does it count THOSE Not in the class action suit?
Does this cost the company anything beyond a Loss of face and a little time to Sort a list on a computer?
Where is the federal fine? Where is the IRS in this and charging for the Contract they had WITH them?
AND for those that dont get it, the IRS and STATE do charge you for estimated taxes. You need to file to get your money back, or find out if you have to pay more because you over estimated.
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Good old blaming the victim…
Re: Re: Victim blaming
Well, if she didn’t want sex, then she shouldn’t have been wearing a such a short skirt. It was her fault I couldn’t keep it in my pants, not mine. /s
On the other hand
On the other hand, haven’t we as a society gotten to the point where we shouldn’t trust commercials that say “free, free, free free”?
Haven’t we all learned that there’s no such thing as a “free lunch”?
So what makes them any different from scammers who claim you’ll get something “for free” as long as you pay a little fee?
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It’s a common expression, but historically false:
“There are from six to seven thousand saloons in Chicago. In one half of these a free lunch is provided every day in the week. And in many cases the free lunch is really a free lunch. That is to say, in many saloons, notably in my friend Hank North’s in Clark Street, scores of people were fed every day and are being fed at this moment without fee, or reward or any payment for drink with which to wash down the more solid viands. In Hank North’s saloon throughout the winter he has given away on an average about thirty-six gallons of soup and seventy-two loaves of bread every day. In very many cases those who took advantage of this open-handed hospitality were too poor to pay a nickel for the glass of beer which in other cases passed as a matter of course.” William Thomas Stead: “If Christ Came to Chicago”
And Intuit really did provide free filing, to those who were able to work around the lies and dark patterns. They had a deal with the IRS requiring them to provide this service, so it’s not absurd that someone would believe the service existed.
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Freephone numbers aren’t free either, but I still don’t expect to pay anything whenever I dial one.
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Details of free lunches.
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“On the other hand, haven’t we as a society gotten to the point where we shouldn’t trust commercials that say “free, free, free free”?”
No, because some things are free. For example, the free browser you’re using to post this comment didn’t cost you a penny, and nobody’s asking you pay to comment here.
“Haven’t we all learned that there’s no such thing as a “free lunch”?”
Because that saying is wrong. I’ve had plenty of free lunches, in terms of money. Sometimes I’m meeting up with someone to discuss the potential of joining them on a side project. Sometimes it’s a celebration where my attendance is the only thing asked of me. Sometimes it’s an actual gift. Maybe the person giving the gift or discussing business is hoping that I give some time or money to them at a later date, but the lunch is free with no obligations.
The point is, free lunches exist all over the place, online and offline. You just have to be wary that some people, but certainly not all, have ulterior motives.
“So what makes them any different from scammers who claim you’ll get something “for free” as long as you pay a little fee?”
If you pay a little fee, it is by definition not free any longer.
here's the solution
FreeTaxUSA. Use it and drive TurboTax under.
(> _ <) =3
(> _ <) =3