ATLANTA — Turbo Tax must surrender over $4 million to Attorney General Chris Carr’s office after being accused of deceiving more than 134,000 Georgia consumers who were paying for what they thought were free tax services.
As a result of the multistate agreement, Turbo Tax will pay $141 million in restitution to millions of consumers across the nation who were unfairly charged, the attorney general’s office said in a news release.
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The company must also suspend its “free, free, free” ad campaign, which lured customers with promises of free tax preparation services, only to deceive them into paying for services.
A ProPublica investigation reported Turbo Tax was using deceptive digital tactics to steer low-income consumers toward its commercial products and away from federally-supported free tax services, the AG’s office said.
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Intuit offered two free versions of TurboTax. One was through its participation in the IRS Free File Program, a public-private partnership with the Internal Revenue Service (IRS), which allows taxpayers earning roughly $34,000 and members of the military to file their taxes for free.
In exchange for participating in the program, the IRS agreed not to compete with Intuit and other tax-prep companies by providing its own electronic tax preparation and filing services to American taxpayers.
Turbo Tax’s website included a “Products and Pricing” page that stated it would “recommend the right tax solution”, but never displayed or recommended the IRS Free File, according to the AG’s office.
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Intuit will pay $141 million in restitution, of which roughly $2.5 million will be used for administrative fund costs, the AG’s office said.
“We are committed to protecting all Georgians from deceptive advertising and other fraudulent practices,” Carr said in a news release. “This type of activity will not be tolerated in our state, and we will hold any business accountable that seeks to exploit financially vulnerable consumers.”
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