AI tax prep gets ugly: Intuit sues H&R Block for trying to ‘tarnish TurboTax’s hard-earned reputation’

Who says tax preparation has to be boring?

Intuit, the maker of popular tax-prep software TurboTax (and many other programs), filed a lawsuit against H&R Block, one of its main competitors, claiming that H&R Block is engaging in “false and misleading marketing through which H&R Block is attempting to gain an unfair competitive advantage and tarnish TurboTax’s hard-earned reputation in the online tax-preparation space.” 

The lawsuit, filed on January 15 in the United States District Court for the Northern District of California, specifically says that “H&R Block is making false and misleading price comparisons between its products and Intuit’s TurboTax products” by falsely representing differences between the company’s offerings in three distinct ways, direct from the legal complaint:

That expert and artificial-intelligence (AI) help is available for less with H&R Block (at $35) than with TurboTax (at $89), when in reality TurboTax offers expert and AI help to nearly 60 million taxpayers for $0.

That H&R Block’s paid do-it-yourself (DIY) products are comparable to TurboTax’s Live Assisted product and are less expensive, when in reality, the comparable H&R Block product costs more than the TurboTax product.

. . . And that the price of TurboTax’s Live Full Service product starts at $169 when in reality it starts at $89.

Ultimately, the case rests on whether Intuit can prove that H&R Block is falsely claiming that its services are comparable and cheaper to Intuit’s. H&R Block’s website does show that its “Deluxe” tax filing option is advertised for $35 (plus $37 for state filing), which includes “help from a live expert” and AI Tax Assist. TurboTax’s offerings, listed on its website, show similar options, with its “Live Assisted” option, which includes “AI-powered Intuit Assist” and a final review by an expert pricing ranging between $0 and $169—with some stipulations. 

Reached for comment by Fast Company, a spokesperson for H&R Block declined to comment, citing pending litigation. A spokesperson for Intuit said, “Intuit is pursuing this matter to ensure consumers have access to accurate information when making their tax and financial decisions.”

Both H&R Block and Intuit launched AI-powered tools in the past year or so, and they’ve both traditionally been highly protective of the tax-prep space and even critical of competition. For instance, both companies voiced opposition to the new Direct File program from the Internal Revenue Service (IRS), which is currently in pilot program status for the 2024 tax year, and which offers some taxpayers a free alternative to private tax-prep services. 

With competition expected to be more fierce in the coming years, the advent of AI-powered tools appears to be opening up a new area of contention among tax-prep service providers.

This post has been updated with the companies’ responses.