$4M in relief announced for Illinoisans deceived by TurboTax owner

ILLINOIS (WAND) - Over $4 million in relief has been secured for Illinois residents deceived into paying for free tax services, per the state's attorney general.

Kwame Raoul said the funding is part of $141 million in restitution Intuit Inc., the owner of tax filing platform TurboTax, has been ordered to pay. This money is part of a bipartisan agreement between every U.S. state and Intuit.

The victims include over 130,000 Illinoisans, Raoul said.

In the agreement, Intuit has to end its "free, free, free" ad campaign that lured customers with free tax preparation services before misleading them into paying, prosecutors said.

“Intuit attracted customers to TurboTax with promises of free tax preparation services, leaving people to learn the hard way that those services were anything but free,” Raoul said. “This settlement holds Intuit accountable for intentionally deceiving taxpayers who were simply seeking an affordable option to help them navigate what can be the daunting process of filing their taxes.”

An investigation into Intuit began after reports surfaced about the company using deceptive digital tactics, Raoul said. The idea was to steer low-income consumers toward its commercial products and away from federally-supported free tax services.

Intuit offers two free TurboTax versions. One was offered through the IRS Free File Program, which is a public-private partnership with the Internal Revenue Service. It allows taxpayers earning up to $34,000 and military members to file for free. Intuit also offered a TurboTax Free Edition that is only free for taxpayers filing "simple returns," as Intuit defined. Prosecutors said Intuit repeatedly used the word "free" in its ads when the "freemium" product is free for only about a third of American taxpayers.

Intuit agreed to reform other business practice aspects, Raoul's office said:

Refraining from making misrepresentations in connection with promoting or offering any online tax preparation products.
Enhancing disclosures in its advertising and marketing of free products.
Designing its products to better inform users whether they will be eligible to file their taxes for free.
Refraining from requiring consumers to start their tax filing over if they exit one of Intuit’s paid products to use a free product instead.

Intuit had withdrawn from the IRS Free File program in the summer of 2021.