TurboTax Free-to-File Class Action Lawsuit


On May 12, 2019, Stueve Siegel Hanson and Gibbs Law Group filed the first nationwide class action lawsuit on behalf of low-income taxpayers who were tricked into paying for tax-filing services that should have been free through a government-mandated agreement between TurboTax and the IRS. TurboTax is an online tax filing service used by millions of customers every year to electronically file their taxes.  Based on an agreement with the IRS, any taxpayer whose adjusted gross income is $66,000 or less is eligible to use online tax preparation software to prepare and file their tax returns for free for the 2018 tax season.

The lawsuit alleges that TurboTax’s parent Intuit, Inc. violated its agreement with the IRS by intentionally driving customers away from its free software, programming its website to hide the free filing option from search engines, and creating a large-scale marketing campaign to promote its “Free Guaranteed” tax-filing program and then diverting qualified taxpayers to its paid product offerings.

“TurboTax and its competitors have spent millions of dollars lobbying against the IRS creating its own free tax filing system that would drastically threaten the industry’s profits, while at the same time engaging in intentionally misleading tactics to deprive taxpayers of the opportunity to make an informed decision about their tax-filing service.” said Austin Moore of Stueve Siegel Hanson LLP.

Intuit also tries to advance its scheme by imposing forced arbitration on consumers.  In prior cases, TurboTax has utilized a forced arbitration clause in its online Terms of Service to prevent customers from joining together as part of a class action and suing in court.

“Given the significant number of low-income taxpayers who were affected by TurboTax's conduct, we call upon TurboTax to join tech companies like Google, Facebook, and Apple and disclaim the use of forced arbitration in customer contracts affecting our country's most vulnerable citizens,” said Norman Siegel of Stueve Siegel Hanson LLP.

The case has been reported on by Bloomberg, The Washington PostGizmodo, and Law.com among others.

About Stueve Siegel Hanson LLP

Stueve Siegel Hanson represents individuals and businesses nationwide on a contingency basis. The firm has recovered over $1 billion for its clients, and has appeared in back-to-back years in the National Law Journal’s list of top 100 Jury Verdicts for its work representing victims of corporate fraud.

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