Intuit Inc. allegedly made the free version of its TurboTax software more difficult to access in an effort to divert customers to its paid system, according to a new lawsuit.
The complaint filed Sunday in the U.S. District Court for the Northern District of California claims Intuit breached its contract with the Internal Revenue Service and took advantage of the public when it directed taxpayers who were eligible for TurboTax’s free filing to its paid services instead.
Norman Siegel, partner at Stueve Siegel Hanson in Kansas City, Missouri, who represents the prospective class, said the breach of contract impacts low-income Americans. In 2018, taxpayers earning an adjusted gross income of $66,000 or less could file taxes for free with a dozen providers participating in the Free File Alliance, including Intuit.
The three TurboTax customers, hoping to represent a larger class of Americans, also assert that the company intentionally buried its free filing by creating a separate web page from its main website and altering its code to make it hard for search engines such as Google to dig up. Intuit also marketed paid offerings as “Free Guaranteed,” allegedly misleading users who found out about the costs after filling out their information.
“We hope that Intuit will be held accountable for its egregious conduct in this case,” Siegel wrote in an email.
A representative from Intuit declined to comment.
Sunday’s lawsuit is part of a wave of litigation filed against TurboTax and H&R Block after a ProPublica investigation revealed the companies allegedly guided qualified users away from free services. This isn’t the first lawsuit spurred by the journalism organizations’ reporting. In March, Facebook settled with civil rights and labor groups and agreed to change its ad platform after a 2016 ProPublica report showed it was possible to target advertising to users based on race.