Class-Action Lawsuit Says TurboTax Tricked Taxpayers Into Paying For 'Free' Tax Prep

Less than a week after ProPublica found that TurboTax lied to taxpayers about its free filing program, 'a new class action lawsuit against TurboTax maker Intuit claims the tax service breached its agreement with the Internal Revenue Service by intentionally obscuring its free filing service and charging qualifying taxpayers anyway,' reports Gizmodo. From the report: The complaint was filed Sunday in a California district court on behalf of plaintiffs from three different states. TurboTax's free filing service is offered -- alongside programs from other tax companies -- in partnership with the IRS and is meant to benefit 70 percent of U.S. taxpayers with adjusted gross incomes of $66,000 or less. In TurboTax's case, the free filing service should be offered to those with adjusted gross incomes of $34,000 or less, per the IRS Free File Software page.

But according to the suit, TurboTax violated its agreement with the IRS by separating its free filing page from its primary service as well as by intentionally hiding the service from search engines -- and therefore qualifying taxpayers -- by altering its code, a discovery unearthed through ongoing investigations into TurboTax's practices by ProPublica. Additionally, TurboTax is accused of using language meant to lead taxpayers to believe that its primary service is free only to later charge them. When asked about the lawsuit, a spokesperson for TurboTax said in a statement: 'We are committed to offering Americans the ability to file their taxes for free, and we're committed to the IRS Free File program. More IRS Free File returns have been filed using a TurboTax product than any other of the member companies -- including approximately 1.2 million returns this tax season. We look forward to working with the IRS and private industry to improve the Free File program and help it continue to grow.'

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