TurboTax and H&R Block must make free filing services more accessible to taxpayers under new IRS agreement (INTU, HRB)

turbotax free file

TurboTax maker Intuit, H&R Block, and other tax prep companies are now barred from hiding their free services from search results as part of a new agreement with the Internal Revenue Service.
The agreement also allows the IRS to create its own free filing service that directly competes with commercial products like TurboTax.
Previously, the IRS had promised not to compete with tax prep companies in exchange for them offering free filing services to taxpayers who earn less than $69,000 per year — roughly 70% of Americans.
The new agreement, which effectively ends that deal, comes after reporting by ProPublica revealed that Intuit and H&R Block had intentionally hid their free filing services from Google.
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Intuit, H&R Block, and other major tax preparation software companies are now prohibited from hiding their free filing services from Google or other search results pages as part of a new agreement with the Internal Revenue Service.

In a press release Monday, the IRS announced several changes to a longstanding agreement with the Free File Alliance, a group of twelve tax prep companies that includes TurboTax maker Intuit and H&R Block.

Previously, the IRS had promised not to compete directly in the online tax filing marketplace in exchange for FFA companies offering free filing services to any taxpayers earning less than $69,000 — approximately 100 million Americans or 70% of all taxpayers.

As part of the addendum announced Monday, however, the IRS revoked that promise. Under the updated agreement, companies are also "prohibited from engaging in any practice that would cause the member's Free File landing Page to be excluded from an organic Internet search."

In April 2019, an investigation by ProPublica found that Intuit and H&R Block were deliberately hiding their free filing services from Google and other search engines. ProPublica also reported in October that Intuit has spent decades lobbying against efforts to make it easier for Americans to file their taxes for free.

"Intuit is – and for two decades has been – deeply committed to providing free tax preparation and filing for those who need it the most," the company said in a blog post Monday, calling the new IRS agreement a "meaningful step forward."

In an emailed statement to Business Insider, a spokesperson for H&R Block said the company "is proud to have helped millions of Americans file their returns for free, including under the IRS Free File program. We continue to support the IRS Free File program and will again participate in the program as recently amended for the upcoming tax season."

H&R Block also announced in a press release on the same day as the IRS agreement update that its virtual tax prep service, Tax Pro Go, is now available for $99 at more than 3,300 Walmart locations.

The IRS has not yet announced any plans to offer its own tax filing service, but the new agreement paves the way for it to do so, which could significantly disrupt the commercial tax filing industry.

SEE ALSO: How to file taxes for 2019

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