Jackson Hewitt Tax Service sued H&R Block to stop a new advertising campaign that it said misleads customers about tax refund loans and disparages Jackson Hewitt’s competence.
The lawsuit comes on the eve of the main U.S. tax filing season, a crucial period for the largest U.S. tax preparation companies because the February-to-April quarter accounts for roughly three-fifths of annual revenue and much of their profit. H&R Block did not immediately return requests for comment.
The lawsuit relates to so-called “refund anticipation loans,” which for a fee allow taxpayers quick access to expected refunds, rather than having to wait for the IRS to send checks.
According to the complaint, H&R Block falsely claimed that its “Second Look Review” program, which reviews past tax returns prepared by rivals, found that two-thirds of prior returns prepared by Jackson Hewitt contained mistakes.
“H&R Block’s 2 out of 3 claim necessarily implies the false claim that two out of three Jackson Hewitt customers who are entitled to refunds have been short-changed due to Jackson Hewitt errors or incompetence,” the complaint said.