H&R Block and Intuit, the maker of TurboTax software, are facing calls from lawmakers for the Internal Revenue Service to cancel agreements with the companies and launch an investigation into their business practices.
The calls, which came in the form of letters sent to the IRS and FTC from presidential hopefuls Senator Elizabeth Warren and Bernie Sanders among other lawmakers, stem from allegations the companies didn’t promote free government tax preparation options to customers, reported CNBC. The lawmakers want the IRS to make these companies refund taxpayers who paid for services but were eligible for free services from the government. “These companies’ actions in hiding Free File [Alliance] from search engine results — and therefore from consumers — in order to artificially inflate profits and deprive low-income consumers of cheaper products merit investigation as unfair and deceptive practices,” the group said in one of the letters which were sent to the IRS and the Federal Trade Commission, reported CNBC.
The Free File Alliance is an agreement between the IRS, states and tax preparation companies that gives Americans who make $66,000 a year or less in adjusted gross income free tax preparations online. In return, the IRS vowed not to launch its own free online service. But according to reports, H&R Block and Intuit are accused of adding code that prevents search engines from listing the free versions of their tax preparation online services. The aim is to direct the customers to the paid services offered by the company, noted the report. Those reports prompted lawmakers to call on the IRS and the FTC to investigate the companies. Governor Andrew Cuomo of New York has already asked two state agencies to look into the allegations, reported CNBC. The report noted lawmakers aren’t only going after H&R Block and Intuit. TaxSlayer, FreeTaxUSA, and 1040.com are also allegedly hiding the free tax tools, employing similar tactics to those used by H&R Block and Intuit.