H&R Block is seeking an order that could shake up a Federal Trade Commission complaint that its tax preparation software engages in deceptive marketing with ads that tout the service as free. filed suit against the Federal Trade Commission.
The lawsuit, filed in federal court in Kansas City, Missouri, alleges that the FTC violates the U.S. Constitution by using in-house administrative law judges to hear cases.
Wednesday’s lawsuit cites the U.S. president’s constitutional power to remove “inferior officials.”
The FTC’s internal judges are improperly insulated from that authority, and the agency says it should abandon its use.
“The FTC may still be able to justify law enforcement interests by making its own rulings,” the complaint states.
H&R Block declined to comment on the lawsuit, but said it “offers fair and transparent pricing.”
“For more than 20 years, H&R Block has provided free DIY filing options to help millions of Americans file their taxes. Educational resources, free tools, calculators, and more. The numerous resources and tax labs we offer demonstrate our commitment to making tax filing more accessible and transparent for everyone,” said Dara Redler, chief legal officer at H&R Block. he added. she said in a statement to the Post.
Last month, the FTC accused H&R Block of deceiving customers with extensive marketing promoting a “free” online tax filing service that actually only applied to simple returns.
The ad did not explain what a simple return was, the company had changed its definition of the term “several times in recent years,” and H&R Block was aware of consumer dissatisfaction and confusion with the ad, the commission said. Stated.
“H&R Block designed its online products to present consumers with an obstacle course of tedious challenges and cause them to overpay for their products,” said Samuel Levin, director of the FTC’s Bureau of Consumer Protection. Consumer Protection Commissioner Samuel Levine said in the filing.
H&R Block’s website advertises a free alternative that costs between $35 and $85 for federal returns.
The agency did not seek civil penalties, but accused H&R Block of wrongfully deleting consumers’ tax data.
The FTC did not immediately respond to The Post’s request for comment.
H&R Block denied the FTC’s allegations. A hearing before an administrative judge is scheduled for October 23.
The FTC’s administrative law judge presides over the hearing, examines the evidence, and issues findings that can be appealed to the full Commission.
The agency will then hear arguments and issue a final order.
These decisions may be appealed to US courts.
TurboTax software maker Intuit says it plans to appeal a ban imposed on it by the FTC for offering free advertising and marketing services even though many consumers are ineligible for bargain offers. Stated.
Similar to the allegations against H&R Block, the FTC said Intuit engaged in deceptive practices.
In 2022, the company paid $141 million in damages for similar claims.
However, other cases have challenged the use of administrative law judges by federal agencies.
In November, the U.S. Supreme Court heard a challenge to a similar case by the U.S. Securities and Exchange Commission, which had an administrative law judge.
The court’s decision, expected by the end of June, could have far-reaching implications for these internal agency courts.
Comes with post wire.
