Feldman, Shepherd, Wohlgelernter, Tanner & Weinstock, a plaintiff’s firm out of Philadelphia, thinks so. They have filed suit in the U.S. District Court for the Eastern District of Pennsylvania on behalf of Philadelphia resident Stacie Byers against members of an income tax software group, Free File Alliance. The suit, Byers v. Intuit Inc., alleges that members of the Free File Alliance, such as H&R Block and Intuit, have charged excessive e-filing fees.
Byers alleges that the IRS contract with the Free File Alliance was supposed to result in free e-filing for 70% of Americans. However, that was not the case as the limits for free filing were unrealistic. More than 70 million taxpayers were not eligible for free e-filing.
Byers’ attorneys point out that the IRS encourages e-filing but has made it impossible to e-file for free. There are fees to file and a cost associated with purchasing the software for tax return preparation.
The Free File Alliance Executive Director Timothy D. Hugo had indicated before the House Ways and Means Committee that the alliance expected to offer free filings for 93 million Americans. Only a small percentage of that (about 17 million) have actually filed for free.
Hmm. While mulling this over this morning, albeit admittedly not having had a full cup of coffee, I have to think there’s some merit here (and I am not generally a fan of class action litigation). It is true that it is nearly impossible to e-file for free if you don’t qualify for the free filings. And considering that the median income in the US is about $48,000, the $52,000 cap for free filing seems awfully ambitious for a 70% expected free file rate.
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