January 25, 2024 - TurboTax, a widely used tax filing software, has recently come under investigation. This article aims to provide an in-depth understanding of the ongoing investigation and its implications.

The Investigation

The investigation into TurboTax was initiated following allegations of deceptive advertising practices. The company was accused of misleading consumers with advertisements for “free” tax products and services, which many consumers were ineligible for.

The Allegations

The allegations against TurboTax originated from a report in 2019 that claimed the company used deceptive tactics to steer low-income tax filers away from federally supported free services for which they qualified. Instead, these individuals were directed towards a product that charged a fee to file tax returns.

The Settlement

In response to these allegations, TurboTax agreed to a settlement. As part of this agreement, the company consented to pay a significant amount to lower-income Americans who were unfairly charged for free tax-filing software. This multi-state agreement affected millions of consumers.

Who is Eligible for the Settlement?

Eligibility for the settlement is determined by several factors. Individuals who used TurboTax for federal returns for certain tax years, but were eligible for the free version of the software through IRS Free File, may qualify. Additionally, those who started their tax returns with TurboTax’s free software, were informed they were ineligible for that product, and subsequently paid for a TurboTax product, may also be eligible.

The Aftermath

Despite the settlement, TurboTax continues to deny any wrongdoing. The company expressed its commitment to providing vital services to American taxpayers. However, the Federal Trade Commission (FTC) issued an Opinion and Final Order, stating that TurboTax had indeed engaged in deceptive advertising practices.

The TurboTax investigation serves as a reminder of the importance of transparency and honesty in advertising. Consumers are encouraged to stay informed and vigilant when choosing tax filing services.