Intuit TurboTax deceived thousands of residents, Attorney General Bob Ferguson says

Washington Attorney General gets big win against Intuit Turbo Tax

SEATTLE, Wash. — Attorney General Bob Ferguson announced the tax prep software company Intuit will return more than $3.75 million to 121,102 Washington taxpayers.

Ferguson’s office said 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 IRS.

They said between 2016 and 2018, the affected Washingtonians filed more than 127,000 tax returns through Intuit’s paid software, even though they were eligible for free filing via the IRS. The IRS offers free electronic filing of all tax returns with incomes up to $73,000. Eligible parties will receive around $30 for each year they paid Intuit to file their returns through TurboTax. Some Washingtonians are eligible for multi-year restitutions.

“I will continue holding corporate interests accountable when they deceive Washingtonians into paying millions of dollars for a free service,” Ferguson said. “Intuit’s deceptively earned profits will return to hardworking Washington families to help pay for groceries, car payments and other needs.”

Washingtonians do not need to do anything to receive restitution. A claims administrator will reach out to impacted taxpayers identified in Intuit’s records and arrange payment of the restitution they are owed.For more information on who is eligible to electronically file their tax return for free through the IRS, go to https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free.

The investigation began in 2019 when ProPublica published articles outlined some of Intuit’s alleged conduct. Other states joined the investigation the following year.

The states alleged that Intuit had deceptive marketing practices surrounding its TurboTax Free Edition and didn’t disclose the eligibility requirements to use its free product. They also accused the company for failing to inform users about the free IRS filing program.

In a press release, the Attorney General’s Office said this is what Intuit must do to institute significant corporate reforms as part of the resolution. Among other requirements, Intuit must:

  • Stop misrepresenting that consumers must upgrade to its paid product if they are eligible to file for free
  • Accurately disclose in its marketing materials, videos and on its websites that, at a minimum, limitations apply to the eligibility for its free product, or, where possible, disclose the limitations on a consumer’s ability to use the free product and that not all taxpayers qualify for its free product
  • Disclose at the earliest point possible during filing in its free edition if a consumer does not qualify for the free edition
  • Stop prompting consumers to upgrade to Intuit’s paid tax product if they are eligible to use the free product

Assistant Attorney General Mina Shahin and paralegal Allison Cleveland with the Attorney General’s Consumer Protection Division handled the case for Washington. The resolution can be found here.