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Suit: Tax software firms overcharge for e-filing

PHILADELPHIA — A Philadelphia woman is seeking class action status for a lawsuit accusing H&R Block, Intuit and other tax-software makers of overcharging consumers who pay to file their taxes online.

The class, if approved, could number tens of millions of people, according to lawyers who filed the federal lawsuit this week in Philadelphia.

The Internal Revenue Service does not handle electronic returns directly but instead has forged an agreement with a consortium of about 20 companies to handle such returns.

Under the agreement, the software makers agreed to provide free e-filing for low- and moderate-income taxpayers while the IRS agreed not to develop its own e-filing program that would compete with the companies.

Taxpayers who made more than the $52,000 income threshold in 2007 had to pay to e-file, a process that typically offers the benefit of a faster refund.

"It's a tax on tax-filing," said lawyer Thomas More Marrone, who filed the suit on behalf of plaintiff Stacie Byers.

Byers bought an H&R Block program to e-file her federal taxes, the suit states. While the suit did not specify what she paid, most programs cost $15 to $20 and up.

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