Who says tax preparation has to be boring?
Intuit, maker of the popular tax preparation software TurboTax (and many other programs), filed a lawsuit against one of its main competitors, H&R Block, alleging that H&R Block engaged in “false and misleading marketing” in an unfair manner. to gain a competitive advantage and damage TurboTax’s hard-earned reputation in the online tax preparation space.”
The lawsuit, filed on January 15 in the United States District Court for the Northern District of California, specifically states that “H&R Block made false and misleading price comparisons between its own products and Intuit’s TurboTax products by falsely representing the differences between the company’s offerings.” . Three different paths that come directly from the legal complaint:
This expert and artificial intelligence (AI) help is available for less at H&R Block ($35) than at TurboTax ($89); whereas in reality, TurboTax offers expert and AI assistance to nearly 60 million taxpayers for $0.
H&R Block’s paid do-it-yourself (DIY) products are comparable and less expensive than TurboTax’s Live Assisted product; whereas in reality the similar H&R Block product costs more than the TurboTax product.
. . . And the price for TurboTax’s Live Full Service product starts at $169, while it actually starts at $89.
Ultimately, the case hinges on whether Intuit can prove H&R Block’s false claim that its services are comparable to and less expensive than Intuit’s. H&R Block’s website shows the “Luxury” tax filing option advertised for $35 (plus $37 for state filings); this includes “help from a live expert” and AI Tax Help. TurboTax’s offerings listed on its website show similar options, with “AI-powered Intuitive Assistance” and a “Live Assisted” option that includes a final review by a pricing expert ranging from $0 to $169 with some terms.
Reached by Fast Company for comment, an H&R Block spokesperson declined to comment, citing ongoing litigation. A spokesperson for Intuit said: “Intuit is monitoring this matter to ensure consumers have access to accurate information when making their tax and financial decisions.”
Both H&R Block and Intuit have launched AI-powered tools over the past year, and both have traditionally been highly protective of the tax preparation space and even critical of competition. For example, both companies have voiced opposition to the Internal Revenue Service’s (IRS) new Direct File program, which is currently in pilot program status for the 2024 tax year and offers some taxpayers a free alternative to specialized tax preparation services.
While competition is expected to become fiercer in the coming years, the emergence of AI-powered tools appears to be opening up a new arena of contention among tax preparation service providers.