TurboTax, H&R Block sued for allegedly hiding free filing service from low-income taxpayers

TurboTax, H&R Block sued for allegedly hiding free filing service from low-income taxpayers
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Tax filing services H&R Block and Intuit, the maker of TurboTax, are being sued by the Los Angeles city attorney for allegedly making it difficult for low-income taxpayers to find the free filing service provided by the IRS.

The lawsuits against the two companies filed Monday allege they "intentionally obscure[ed] and fail[ed] to disclose" the difference between products that costs money to file taxes and the Free File program, according to NBC News.

H&R Block and Intuit have faced scrutiny from lawmakers and now Los Angeles officials after a report from investigative nonprofit news outlet ProPublica found the companies allegedly intentionally made the free service on its platforms hard to find.

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The IRS that mandates that tax services companies provide a no-cost option to people with an adjusted gross income of $66,000 or less.

"This is a situation where free should be free, but we allege the way these companies have structured their websites and misled consumers, free has turned out not to be free at all in so many cases," Los Angeles City Attorney Mike Feuer told NBC News.

The lawsuit filed by Feuer's office on behalf of residents of California alleges the tax filing software from the two companies "manipulates them into paying” even after users inputted information showing their income to be under the threshold to qualify for the free service.

Feuer is expected to hold a press conference Tuesday afternoon further detailing the allegations in the lawsuits.

The IRS said this week it is reviewing allegations concerning its Free File program, following urging from Democratic lawmakers.

Intuit told NBC News in a statement that "we stand behind our actions as being both appropriate and consistent with our values. Any suggestion that Intuit does not support the IRS Free File Program is flat wrong."

"We look forward to working with the IRS and private industry to improve the Free File program and help it continue to grow," the company added.

H&R Block said it is in compliance with the IRS's Free File program, offering four ways to file for no cost.