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A class action lawsuit has been filed against H&R Block by a customer who alleges that the company redirects low-income taxpayers who are entitled to a free tax program to their fee-based tax filing products.
Plaintiff Aaricka Swanson says she paid for H&R Block’s online tax filing software in order to file her tax returns, despite the fact that she was qualified for the IRS Free File Program.
The plaintiff states that she was charged $64.94 to file her taxes though H&R Block’s software.
Specifically, Swanson says she was charged $29.99 for a “federal return” and $34.95 for a “Refund Transfer Fee.” The plaintiff alleges that H&R Block should not have charged her anything because her adjusted gross income was under $66,000.
“Had H&R Block not misrepresented the nature of its tax preparation and e-filing services and informed Plaintiff Swanson of the existence of and her eligibility to use the Free File software, she would not have agreed to purchase H&R Block’s software,” the H&R Block class action lawsuit claims.
The plaintiff also states that she believed her only option was to use the paid software and that if H&R Block made the free tax filing program accessible, she would have opted to use it over the paid version.
The H&R Block class action lawsuit claims that, under an agreement with Free File Inc. and the IRS, H&R Block and other tax companies must offer 70 percent of United States taxpayers (currently, those with an Adjusted Gross Income of $66,000 or less) the chance to file their taxes at no cost.
The plaintiff alleges that H&R Block and other online-tax preparation companies created the entity Free File Inc., which was formed to work with the IRS to provide free electronic filing services for those who qualify.
The H&R Block class action lawsuit states that the agreement between the IRS and Free File was created so that the IRS would not have to start their own free-filing software.
“H&R Block, however, has been luring customers into paying for a service that it promised the government and consumers it would give away for free,” the plaintiff claims.
Swanson notes that H&R Block breached its contract with the IRS by hiding access to the Free File Program and redirecting taxpayers who qualify to the fee-based products. The plaintiff claims that H&R Block advertised one of its products under the name “Free Online” which led many taxpayers into believing that they were filing their taxes under the Free File Program.
The plaintiff alleges that she was then hit with charges after spending a long time entering information and preparing to file her tax return.
“After luring lower-income consumers to begin preparing their returns with the ‘Free Online’ software (which is not actually free for most taxpayers), H&R Block then manipulates consumers into paying for product upgrades and upsells,” the H&R Block class action lawsuit claims.
The plaintiff says that because of their conduct, H&R Block has made millions of dollars in “ill-gotten gains from persons who can least afford it.”
Did you qualify for H&R Block’s Free File Program only to be charged for preparing your tax return? Leave a message in the comments section below.
The plaintiff is represented by Eric D. Barton and Sarah A. Ruane of Wagstaff & Cartmell LLP and Yitzchak Kopel and Andrew Obergfell of Bursor & Fisher PA.
The H&R Block Free Filing Class Action Lawsuit is Swanson v. H&R Block Inc., et al., Case No. 4:19-cv-00788, in the U.S. District Court for the Western District of Missouri.
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728 thoughts onH&R Block Class Action Says Free Tax Filing Option Hidden
my 91 year old was charged 290. for this year taxes with a agi of 36,000.
I’m a low-income single mom and they charged me $400.00 for a simple return.
I’ve been going to H&R Block for the past few years, and I’m low income but they always charged me for their services, plus peace of mind but yet IRS still intercept my returns or sent me notices, H&R Block never resolved my tax issues. I’m very disappointed in them..
Please add me
I have used them for 20 years
Free ain’t free I guess when it comes to H&R Block. I filed this year with no income coming in. Went to the “free” website to file because I usually go in the office. I tried to avoid the high payments because I was injured at work and workers comp wasn’t paying me like they should be. So I really needed every dollar I could get. But instead, I ended up with $149 worth of charges and still can’t figure out why since I was only filing a 1040. Already being represented because of a privacy violation class action. Who’s got this?