The Allegations
In February 2024, the Federal Trade Commission brought an action against the tax-preparation giant H&R Block over its online filing products. The FTC alleged two main problems. First, H&R Block heavily advertised “free” online filing, but the free option only covered “simple returns” — a category the company defined narrowly and changed repeatedly — so many, if not most, filers who started for free were pushed to pay. Second, when customers realized they were in a pricier product than they needed and tried to downgrade, H&R Block made it deliberately difficult (requiring a call or chat with customer service) and deleted the tax data they had already entered, forcing them to start over.
Both practices, the FTC said, were designed to trap users in more expensive products than they needed.
The Settlement
H&R Block agreed to a settlement to resolve the case. It will pay $7 million and change the practices at issue: it can no longer unfairly require customers who want to downgrade to contact customer service, can no longer delete users’ previously entered data when they switch to a cheaper product, and must stop making deceptive “free” filing claims. The action mirrored the FTC’s earlier, larger case against TurboTax maker Intuit over similar “free” advertising, signaling a broad crackdown on how tax-prep companies market free filing.
The practice changes — especially not deleting data and not blocking downgrades — are the meaningful consumer wins.
What Taxpayers Should Know
Before starting any “free” tax product, check whether your situation actually qualifies, since ‘free’ often means only the simplest returns. Genuinely free options exist for many filers — the IRS Free File program and, increasingly, the IRS’s own Direct File tool — so it is worth comparing before paying. If a product pressures you to upgrade or hides the price, that is exactly the behavior regulators have targeted.
Before You Act
Thinking About Filing a Claim?
Most plaintiff lawyers offer a free initial consultation and work on contingency, meaning no fee unless there is a recovery. LawsuitWatch is not a law firm: we publish explainers, and we do not provide legal advice, representation or referrals. Your state bar directory is the reliable place to find and verify a lawyer.
H&R Block Lawsuit: The FTC 'Free Filing' Case: Frequently Asked Questions
Answers to the most common questions about this case and your legal options.
What is the H&R Block lawsuit about?
The FTC alleged H&R Block deceptively marketed 'free' online filing that only covered narrowly defined 'simple returns,' and made downgrading hard while deleting users' entered tax data, pushing customers into pricier products.
How much did H&R Block pay?
$7 million, plus agreeing to stop deceptive 'free' claims, stop unfairly requiring customers to call to downgrade, and stop deleting users' previously entered data when they switch to a cheaper product.
How can I actually file taxes for free?
Check whether your situation qualifies before starting a 'free' product. Many filers can use the IRS Free File program or the IRS Direct File tool. Compare options before paying, and be wary of pressure to upgrade.
Legal Disclaimer
This article is general legal information, not legal advice, and does not create an attorney-client relationship. Case status, eligibility criteria, and any amounts described are as reported at the date shown and may change. Consult a licensed attorney in your jurisdiction about your own situation.