Pound of Flesh, Returned 💸

The Intuit TurboTax settlement reflects a high-profile example of what happens when a company weasels out out something it agreed to do … at least for a while.

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They will get your money, no matter how many times they have to say “free.” (Charles Barilleaux/Flickr)

Is there a news story that was as outright owned on a consistent basis, for such a long period, as ProPublica’s reporting on TurboTax’s controversial initiatives around its quote-unquote “free” offerings?

I think not. Since the nonprofit news outlet first covered the topic way back in 2013, the organization has published more than 40 stories about the way that companies focused on tax-filing, particularly TurboTax maker Intuit but also H&R Block, fought against efforts to nationalize taxes, but also obfuscate any efforts to offer “free” taxes to low-income customers. It may be one of the most consistent dunk jobs a journalistic outlet has done on a single company in the modern era. ddd

And this week, the effort showed some real results beyond just the negative press it usually was. New York Attorney General Letita James announced a $141 million settlement, targeting 4 million Americans in all 50 states and the District of Columbia, that will see up to $90 returned to those customers who paid TurboTax for something the IRS intended for them to have for free.

Just one example of TurboTax’s years of misleading “free” advertising.

(And not in the “free free free free” sense that Intuit has confusingly promoted for years. The company’s approach on that front, which wound down only recently, was shut down as a part of the settlement.)

“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,” James said. “This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal. New Yorkers can count on my office to protect their wallets from white-collar scammers.”

While not the last action likely to come in this longstanding issue—the Federal Trade Commission is still pursuing action against the company—this is nonetheless a goundbreaking settlement that nails down a company that used devious tactics to hide a federal program from millions of people, all in an effort to save its bottom line.

In a lot of ways, this conflict has long highlighted the ways that companies take advantage of those not “in the know” in efforts to help improve its bottom line. The most creative and egregious way Intuit did this was by literally blocking the page for its version of the Free File partnership, launched with the IRS in the mid-2000s, from Google results, which helped play into the broader confusion the company’s free-oriented marketing created. (The service advertised on television was not, in fact, free.)

As ProPublica has pointed out many times in this series, there’s no reason for a significant portion of Americans to even need to use an intermediary like TurboTax to file their taxes. After all, the federal government already has most of that information internally, and could handle most of the legwork for the vast majority of Americans without the help of an external company. Intuit is a great example of what I wrote about earlier this week, of someone who fights doing something they don’t want to do by making it aggressively difficult to do things the expected way.

There is an argument for deeper reforms here—for Congress to pass a workaround so this industry of people that take their annual cut simply didn’t exist to the degree that it does. But that would require political will.

The best we can hope for now, arguably, is that next year’s taxes will be a lot less awful for a significant number of people.

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Ernie Smith

Your time was just wasted by Ernie Smith

Ernie Smith is the editor of Tedium, and an active internet snarker. Between his many internet side projects, he finds time to hang out with his wife Cat, who's funnier than he is.

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