H&R Block Loses Lawsuit Trying to Stop Intuit TV Ads
A federal court has denied H&R Block’s effort to stop Intuit from continuing to air a pair of TV commercials for TurboTax that comically suggested tax prep franchise employees worked as plumbers and clothing store clerks outside of tax season.
The U.S. District Court for the Western District of Missouri ruled against Kansas City, Mo.-based H&R Block’s attempt to pull the TurboTax ads off the air. Three divisions of Block had filed suit last week against the ads. In one ad, a shopper in a women’s clothing department is greeted affectionately by a store employee who remembers doing her taxes the previous week.
In the other ad, a plumber who is fixing a family’s kitchen sink reminds them that he prepared their tax return. The commercials don’t mention H&R Block by name, but Intuit contrasts the lack of experience needed at “major tax stores” to its own staff, saying it hires only CPAs, Enrolled Agents and tax attorneys to provide tax advice to customers.
H&R Block CEO Bill Cobb took particular umbrage at the ads, writing emails to employees and franchise owners as well as an open letter to clients.
“TurboTax is trying to promote itself on the backs of our tax professionals, misusing our nearly 60-year-old brand and taking cheap shots at hardworking plumbers and retail sales clerks, not to mention millions of Americans holding down two jobs,” Cobb wrote in his open letter. “We say no way—not on our watch. I am incredibly proud of our tax professionals, who for nearly six decades have built the H&R Block brand, anchored by trust, and I will not let them be tarnished by some overzealous marketing campaign.”
He pointed out that Block has over 7,000 Enrolled Agents, more than any other tax preparation company, and at its tax offices, the average client is served by a tax professional with over a decade of experience and hundreds of hours of training. He also noted that Block’s independent research and analysis advisory group, The Tax Institute, is staffed primarily by CPAs, tax attorneys, Enrolled Agents and former IRS agents.
“We sign and stand behind every return we prepare for our clients in our offices,” said Cobb. “Since 1955, we have prepared and signed more than 500 million tax returns in our offices. TurboTax has prepared and signed zero.”
Intuit greeted the court decision allowing it to continue airing the commercials. “We are very pleased with today’s decision and will continue to vigorously defend these truthful ads,” said Dan Maurer, general manager and senior vice president of Intuit’s Consumer Tax Group, in a statement. “These two TurboTax advertisements factually and accurately portray the tax expertise of TurboTax experts, who are all CPAs, IRS Enrolled Agents and tax attorneys. This stands in sharp contrast to the prior tax experience of some of those who major tax stores advertise for and hire. While experience may vary at tax stores, the truth is, major tax stores actively advertise for and hire tax preparers who have no prior tax experience. It is unfortunate, but not surprising, that H&R Block doesn’t want taxpayers to know this. As a consumer-focused company, we want to ensure U.S. taxpayers get the facts so they can make an informed choice for their tax preparation needs.
“In the last three years, H&R Block has spent hundreds of millions of dollars in advertising trying to convince the American public that they need to go to a tax store to have their return prepared,” Maurer added. “The fact is, more and more Americans choose to do their own taxes with TurboTax to get their maximum refund possible and save more of their hard-earned money. Last year alone, more than 25 million people used TurboTax including nurses, teachers, firefighters, U.S. service men and women and people from every walk of life. More Americans trusted their federal returns to TurboTax last year than to H&R Block stores and all other major tax stores combined. We urge taxpayers to take another look at who is preparing their tax return at the major tax stores.”