H&R Block Faces Consumer Fraud Class Action over Tax Filing Glitch

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New York, NY: A consumer fraud class action lawsuit has been filed against H&R Block by a woman in Indiana on behalf of some 600,000 people allegedly affected by faulty tax returns prepared by the tax services company. H&R Block' acknowledged the filing glitch earlier this year.

Plaintiff Lisa Marie Waugh filed the lawsuit in federal court in April. The class action law suit claims that Missouri-based H&R Block incorrectly prepared hundreds of thousands of tax returns, and due to those errors tax refunds were delayed by as much as six weeks beyond when they supposed date of payment.

The problem specifically relates to a change in the way the IRS processes certain yes or no questions on this year' tax forms. Previously, tax preparers like H&R Block could leave a space blank to indicate "no,"but now they must enter an "N."

However, H&R Block did not update its software in time and follow the new IRS rule. According to an email H&R Block President Bill Cobb sent to customers, anyone that filed their returns before February 22 was affected by the technical glitch, the reports.

According to the lawsuit, some customers lost their eligibility for student loan and grant programs that are dependent upon proper tax filings.

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Reader Comments

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HR Block's online "free edition" changed to $50 fee to complete at the end when I was ready to file it - after I spent approx. 3 hours completing it, stating because I was over 50. Nowhere in the process did it state it had been "bumped up" - until the end. It's fraud. I've got screen shots to prove it.
"Tech Assistance", when I then called, said I'd "filled out forms" that bumped it up to a charged tier (which was never warned of while I was completing my online form), while the end told me that is was since I was over 50 years old - I had to pay the "premium" price, although I filed last year for free at 54 years old and as I started and progressed and as my screen shot shows - it always led me to believe it was the "free edition". In sum, nationally of course they stand to make millions due to this fraud for people like me that will just go ahead and pay the fee to be done with it. It's so obviously fraud and incredibly dishonest not to mention disheartening that a national company that you'd think would be reputable and decent is so arrogantly not so.
I should add that last year they had something of this nature too, different "details", tactics, but the same kind of bait and switch thing, and after calling them on it, they "apologized" then and gave it to me for "free". Tell the truth I'm disgusted that I trusted them to be decent this time too.

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