Cuomo calls for New York state to investigate TurboTax, H&R Block

New York Gov. Andrew Cuomo (D) said Wednesday that he’s asked state agencies to investigate tax preparation services such as TurboTax and H&R Block following ProPublica reports that alleged the companies hid their free tax filing options.

“The allegations against these major tax return preparers are disturbing, and New York will not stand idle as the public’s interest is undermined in order to pad the profits of wealthy corporations,” Cuomo said in a statement. “I am calling on the Department of Financial Services and the Department of Taxation and Finance to investigate these claims to help ensure New Yorkers are protected.”

“We have zero tolerance for these deceptive practices and those responsible will be held accountable for these egregious actions,” Cuomo added.{mosads}

ProPublica, an investigative news outlet, has in recent weeks published several stories critical of the IRS’s “Free File” program. Under the program, the IRS partners with tax prep software companies to have those companies offer free filing services for low- and middle-income taxpayers. It is typically used by only a small percentage of eligible taxpayers.

The news outlet published a story on Friday that alleged Intuit and H&R Block hid their free editions from Google’s search results. On Sunday, ProPublica updated the story, writing that “Intuit has changed the code on its Free File page so that the actually free version of TurboTax is no longer hidden from Google and other search engines.”

Intuit, which makes TurboTax, pushed back on the report, saying in a statement that while its search and marketing practices around the free filing program have been called into question, “these characterizations are untrue and we look forward to sharing the facts with New York regulators.”

H&R Block said in its own statement that its free filing program “grew 8.3 percent this tax season, exceeding the Free File program growth of 6.8 percent” and that the company believes it “is in full compliance with the Free File agreement.”

ProPublica’s stories on the Free File program have also drawn scrutiny from congressional Democrats.

Some progressives have raised concerns about a bipartisan IRS reform bill that the House passed last month by voice vote. The bill would codify the Free File program, under which the IRS agrees not to offer its own free tax filing service — a service progressives would like the IRS to create.

Rep. Katie Porter (D-Calif.) on Monday urged the IRS to consider requiring refunds for taxpayers who paid to use tax prep software but were eligible for free file.