On January 10, 2020, plaintiffs in an action against TurboTax parent company, Intuit, made a motion in federal court in the Northern District of California for class certification, partial summary adjudication and entry of final injunctive relief.
In the suit originally filed in May 2019, the plaintiffs alleged that Intuit violated its agreement with the IRS which required Intuit to cumulatively offer 70% of U.S. taxpayers the option to file their taxes for free through its online tax preparation site. During the 2018 tax season, the plaintiffs argued, any taxpayer whose adjusted gross income was less than $66,000 was eligible to use TurboTax for free. However, it is alleged that Intuit intentionally diverted taxpayers who qualified for free tax preparation away from its free filing program and instead pushed its paid products.
According to court documents, plaintiffs claimed TurboTax segregated its “free file” webpage from its primary website and then altered the website’s code to keep it hidden from search engines like Google so that it would not be easily accessible to qualified taxpayers. It is further alleged that Intuit marketed its paid filing services as “Free Guaranteed,” meaning that users believed they were using the free service only to incur unexpected charges after spending hours entering tax information. Plaintiffs refer to this business strategy as “free to fee.”
The plaintiffs are seeking to represent a class made up of all U.S. residents qualified to file their taxes for free pursuant to IRS Free-Filing Program for the 2018 tax season but were charged by TurboTax a sum of money to file their tax returns. The suit brings causes of action for breach of contract, violation of California Consumers Legal Remedies Act and breach of California Unfair Competition Law. According to the motion, the plaintiffs are seeing an injunction forbidding Intuit from promoting its paid tax preparation product through its bait-and-switch “free to fee” scheme.
The case is: In re Intuit Free File Litigation, Case No.: 3:19-cv-02546, in the U.S. District Court for the Northern District of California
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