Happy Tax sues H&R Block, alleging false advertising

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Tax prep franchise Happy Tax has filed a lawsuit against H&R Block in a federal district court in New York, accusing the tax prep chain of false advertising.

Happy Tax claims H&R Block is making misleading claims by advertising that its upfront and transparent pricing is available “only from H&R Block.” Happy Tax, while a comparatively new and smaller tax prep chain, contends it has been advertising upfront and transparent pricing for its CPA-assisted tax prep services since 2015.

"We filed this false advertising lawsuit to stop H&R Block from intentionally and improperly misleading consumers," said Happy Tax CEO Mario Costanz in a statement, "At Happy Tax, we pride ourselves on being innovators in the tax industry and have always used our upfront, transparent pricing as a key differentiator. While I am pleased that so many in the industry continue to copy our ideas, I don’t appreciate that they are taking credit for them in misleading ways. In interviews and in their investor calls, H&R Block’s CEO has even paraphrased, almost verbatim, my statements about pricing strategies. Happy Tax has invested significant time and money into marketing our convenient, professional and transparent solution, and we will pursue all appropriate legal avenues to protect our brand from false and misleading statements and unfair competition from industry giants."

Happy Tax claims it is entitled to monetary damages and injunctive relief under a federal law known as the Lanham Act. It said it has previously tried to resolve the matter amicably before filing a lawsuit. The Miami Beach-based company said a hearing will be scheduled to request a preliminary injunction from the court to compel Kansas City, Missouri-based H&R Block to cease and desist from making false or misleading statements, stop any use of the false misleading promotions in all forms of media.

H&R Block is rejecting Happy Tax’s contentions. “We believe the claims are without merit, and do not have further comment on this pending litigation,” said spokesperson Susan Waldron.

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Tax franchises Lawsuits H&R Block