First Class Action Lawsuit Accuses TurboTax of Scheme to Deceive Taxpayers with Its “Free to File” Program

May 14, 2019

TurboTax intentionally hid its government-mandated free filing services from taxpayers, according to lawsuit

OAKLAND, CA – Gibbs Law Group LLP and Stueve Siegel Hanson LLP have filed the first nationwide class action lawsuit on behalf of low-income taxpayers who were tricked into paying for tax-filing services that should have been free to them through a government-mandated agreement between TurboTax and the IRS. The lawsuit alleges that TurboTax’s parent Intuit, Inc. created a large-scale marketing campaign to promote its “Free Guaranteed” tax-filing program but then intentionally hid those services from qualified taxpayers, and purposely diverted them to its paid product offerings. This scheme resulted in TurboTax collecting millions of dollars in revenue from low-income taxpayers who should have been able to file their taxes at no cost, according to the lawsuit. Attorneys at Gibbs Law Group and Stueve Siegel Hanson are reviewing potential claims on behalf of additional taxpayers throughout the country who were affected by the TurboTax “free to file” scheme.

The victims assert that TurboTax violated an agreement with the IRS, which required TurboTax and several other tax preparation providers to cumulatively offer 70% of U.S. taxpayers the option to file their taxes for free based on their income level. According to the lawsuit, TurboTax intentionally violated that agreement and broke the law by hiding its free file webpage from the TurboTax website, preventing the free-filing services from being found by consumers through Google and other search engines, and only alerting customers that they would be charged money at the very end of the filing process after they had spent hours inputting their personal information on the platform.

Intuit also tries to advance its scheme by imposing forced arbitration on consumers. In prior cases, TurboTax has utilized a forced arbitration clause in its online Terms of Service to prevent customers from joining together as part of a class action and suing in court.

“The victims of this scheme were intentionally misled and deprived of the opportunity to make an informed decision about their tax-filing service,” said Eric Gibbs of Gibbs Law Group LLP.

“Given the significant number of low-income taxpayers who were affected by TurboTax’s conduct, we call upon TurboTax to join tech companies like Google, Facebook, and Apple and disclaim the use of forced arbitration in customer contracts affecting our country’s most vulnerable citizens,” added Norman Siegel of Stueve Siegel Hanson LLP.

Taxpayers who believe they were wrongfully charged for TurboTax tax-filing services and would like to learn more about their legal rights in the Turbo Tax Free-to-File Class Action Lawsuit may contact our team at 866-344-1901.

About Gibbs Law Group

Gibbs Law Group is a national litigation firm representing consumers in lawsuits in state and federal courts. The firm serves individuals in cases involving financial fraud and consumer protection laws. Gibbs Law Group’s attorneys have been named among the Best Lawyers in America © and have been recognized among the Titans of the Plaintiffs Bar and Top Plaintiff Lawyers in California.

About Stueve Siegel Hanson LLP

Stueve Siegel Hanson represents individuals and businesses nationwide on a contingency basis. The firm has recovered over $1 billion for its clients, and has appeared back-to-back years in the National Law Journal’s list of Top 100 Jury Verdicts for its work representing victims of corporate fraud.