A US tax preparation software maker is being accused of misleading users with a promise of a “discount”, and tricking them into paying for a service that should be available to them for free.
According to an investigative report from ProPublica, the software company, Intuit, specifically deceived members of the US military who qualify for free tax filing by directing them to the paid TurboTax Military program, instead of the TurboTax Free File page.
Namely, TurboTax has a deal with the IRS to provide a free tax filing service to those military members earning less than $66,000. However, some taxpayers who decided to use TurboTax ended up on the wrong page, and paying up to $150 – even though they qualify to use the tax filing service for free.
“An Intuit press release this year announced ‘TurboTax Offers Free Filing for Military E1- E5’ – but refers users to TurboTax Military and does not mention the actual Free File option,” ProPublica writes.
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The investigative website said that the number of those believed to have been tricked in this way was currently unknown, but that they were able to confirm at least four cases, thanks to tax returns and receipts. And they received no comment from the software maker.
This behavior would constitute a violation of TurboTax’s deal with the IRS, and the company is now being investigated by the New York regulator.
ProPublica’s reporters tested both Free File and Military versions of the software, to discover they would have to pay $160 for filing taxes on a $53,000 income using the latter; oh, and enjoy the promised discount – amounting to $5. But there were no costs when using Free File in the same income scenario.
But perhaps the most damning of all was the discovery that the system never informed the TurboTax Military users that they were eligible to use the free service.
This is not ProPublica’s first investigation into the practices of Intuit and its products, with previous reports revealing that the company allegedly manipulated search results by changing its code, to hide the free service from those looking for it via search engines.
And although this behavior is proving to be good for Intuit’s business – with reportedly double-digit growth figures in the first six months after TurboTax Military was first introduced in 2012 – the company is now also facing class action lawsuits.