H&R Block, one of the leading tax preparation companies in the United States, is facing allegations that it deceived customers into paying excessive amounts for their services. The Federal Trade Commission (FTC) claims that H&R Block made it difficult for taxpayers to opt out of pricier tax-preparation plans and misled them about what types of taxes could be done for free.
According to the FTC, H&R Block’s online filing process pressured users into paying more by making it hard for them to choose cheaper price plans. If customers wanted to pay less, they had to start their tax return over again, which regulators argue is an unfair tactic. The allegations against H&R Block are similar to those made against Intuit, the maker of TurboTax, another popular tax-preparation software.
Both H&R Block and Intuit dispute the FTC’s claims. H&R Block’s chief legal officer, Dara Redler, stated that the company allows consumers to downgrade to a less-expensive DIY (do-it-yourself) product through multiple mechanisms while ensuring accurate tax returns. Redler also emphasized that H&R Block provides value, tax expertise, and fair and transparent pricing to its clients.
The FTC’s complaint against H&R Block is part of its ongoing battle for transparent tax-preparation costs. Last month, the FTC ruled that TurboTax had been misleading customers for years regarding the types of returns it would do for free. Intuit is currently appealing this decision.
Both H&R Block and TurboTax offer free tax-preparation services, but these offerings apply to a limited number of returns. TurboTax recently clarified in its advertising that its free edition applies to approximately 37% of taxpayers. However, there are alternatives to these commercial providers for filing taxes for free. For instance, the Internal Revenue Service (IRS) is testing its own no-cost Direct File platform during this filing season. Although limited in its capabilities, the IRS platform is gradually being rolled out in 12 states, with wider availability expected in mid-March.
The allegations against H&R Block and Intuit highlight the importance of understanding the pricing structures and limitations of tax-preparation services. As taxpayers, it is crucial to research and explore all available options to ensure we are not overpaying for services that could be obtained for free. With the IRS introducing its own platform and advancements in technology, it is becoming easier to file taxes accurately and affordably. However, consumers must remain vigilant and informed to make the best choices for their individual tax situations.
 claims and how H&R Block and Intuit are responding. Discover alternatives and tips for filing taxes accurately and affordably.){kind=link}