Business
Did you pay H&R Block for tax help? You may be getting a refund
As Californians do their taxes for 2023, an estimated 70% could qualify for free help online to prepare and file their federal returns. But in the past, only a small percentage of them have taken advantage of these services.
State and local officials have long blamed the lack of participation on two leading tax-preparation companies, Intuit (maker of TurboTax) and H&R Block, and have sued both of them for misleading the public about the free offerings. On Monday, the Los Angeles city attorney’s office announced that H&R Block had agreed to settle the city’s lawsuit and repay customers as much as $1.6 million.
The announcement follows the $141-million settlement that 51 state attorneys general struck with Intuit in 2022. TurboTax customers were reimbursed last year; now it’s H&R Block customers’ turn.
“With tax filing season starting today, this settlement is a reminder that millions of taxpayers are eligible to file their federal tax returns free of charge,” City Atty. Hydee Feldstein Soto said in a statement. “I am pleased to be able to return $1.6 million to people who shouldn’t have paid for a free service.”
H&R Block’s chief legal officer, Dara Redler, said in a statement that the tax preparing company was also “pleased to be able to resolve this matter.”
Here’s what you need to know about the H&R Block settlement, who’ll be eligible for a payments, when the payments will be made and what alternatives are available to the free services offered by H&R Block and Intuit.
What was the lawsuit about?
As with the Intuit lawsuit, the dispute with H&R Block centered on the company offering two free tax-filing products. One was a free, entry-level version of H&R Block’s paid service, the other was H&R Block’s version of the IRS Free File service.
The key difference is that Free File is available to anyone who earns less than the income limit set every year by the IRS, regardless of how they earned their money, while H&R Block’s entry-level service is mainly for wage earners with very simple returns. People who tried to use H&R Block’s free service with more complicated returns — for example, those with income from gig work or other forms of subcontracting — were told they needed to upgrade to the company’s paid service, even if they qualified to use Free File, the city’s lawsuit alleged.
H&R Block denied any wrongdoing, but agreed to the settlement “to avoid the time, expense, and uncertainty of litigation,” the stipulated judgment states.
Who is covered by the settlement?
The settlement applies to Californians who paid H&R Block to prepare and file their returns online from May 6, 2015, to Oct. 31, 2020, despite being qualified for free help under the IRS Free File program.
There’s a caveat, though — the settlement applies just to people who signed up for H&R Block’s free entry-level service and were steered to its paid product. Anyone who used H&R Block’s version of Free File in a previous year is not entitled to a payment.
Free File is available to only people whose adjusted gross income — that is, income minus certain deductions, including retirement savings contributions and student loan interest payments — is under the cap set by the IRS, which rises annually with inflation. For 2020, the limit was $72,000.
According to the California attorney general’s office, 70% of the U.S. residents who file tax returns were eligible to use Free File for their 2020 taxes, but less than 3% did.
How much will the settlement pay?
The amount isn’t specified in the settlement. Instead, it will depend on how many of the eligible recipients respond to the settlement offer, and how many times they used H&R Block’s paid service. The more people who respond, the smaller the amount will be.
According to the city attorney’s office, there are 76,212 Californians eligible for restitution. If they all respond to the offer, they will receive at least $18.89 per use of H&R Block’s paid service.
What do you have to do to obtain a payment?
Just reply to an email. Under the settlement, H&R Block is supposed to identify which of its customers are eligible for a payment. The company will then turn over the customers’ names and addresses (mail and email) to the settlement administrator, who will send them an email asking how they would like to receive their share of the fund.
Here’s another caveat: You won’t be able to collect your payment in cash or by check. Instead, you’ll have to receive the money electronically through a service such as Venmo, PayPal or Zelle.
When will the payments be made?
Under the settlement, which was signed Friday, H&R Block has three weeks to name an administrator, whose costs will be covered by the company, not the settlement fund. The administrator will then have 44 days to email the people who are eligible for payment.
Once the administrator receives your reply, it will have 30 days to make your payment. So if you respond quickly to the administrator’s email, you should get it by mid-April.
What alternatives are there for filing your tax return for free?
Both H&R Block and Intuit stopped participating in the IRS Free File program. But both continue to offer free versions of their paid software to people with simple returns.
Eight online tax-preparation companies participate in Free File, providing free help to taxpayers whose adjusted gross income was $79,000 or less in 2023.
This year, the IRS is offering its own free, in-house tax preparation and filing service called Direct File for people with simple returns, competing with the free services from Intuit and H&R Block. It was launched Monday on an invitation-only basis, though, and won’t be widely available until later in the tax-filing season.
The AARP Foundation Tax-Aide and the IRS-sponsored Volunteer Income Tax Assistance program can connect you to a volunteer tax preparer who will file your tax return for you or help you do it yourself, at no charge to you. These services provide tax preparation or guidance only to low- and moderate-income taxpayers who meet the income limits, or who have disabilities or limited English proficiency.
Several of the participants in Free File also offer free help preparing and filing California returns. And the state Franchise Tax Board offers qualified taxpayers the ability to file their returns for free online through a service called CalFile.
Business
Read Nick Bilton’s Letter to Scott Pelley
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
Business
Aspiration co-founder sentenced to 14 years for fraud
The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.
The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.
Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.
Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.
Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.
In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.
The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.
Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.
The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.
The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.
Business
Monterey Park takes landmark vote on banning data centers
Residents in the city of Monterey Park will be the first in the nation to vote on a permanent ban on data centers Tuesday.
If approved, Measure NDC would prohibit data centers within the city limits and could only be overturned by another vote.
Yard signs saying “No Data Center” in English and Chinese with images of dragons line sidewalks in the San Gabriel Valley city.
As a wave of data center opposition sweeps the country, numerous towns and counties across the U.S. have instituted temporary moratoria and other restrictions on the facilities. But only a handful have instituted indefinite bans, and just four other towns have sent related matters to the ballot.
Supporters are hoping the vote will set a precedent for the rest of the region, where residents are fighting proposals in Vernon and City of Industry.
“This is about as permanent a ban as we can get,” said Steven Kung, co-founder of the group No Data Center Monterey Park. “Winning Measure NDC would send a huge message to the rest of the San Gabriel Valley about how residents don’t want data centers.”
The ballot measure emerged from the fight against a 247,000-square-foot center proposed in 2024 by the Australian-owned investment firm HMC StratCap for a residential area in Monterey Park.
The facility would have sat less than 500 feet away from the nearest home and used three times the electricity of the 60,000-person, predominantly Asian American city.
While the developer touted the potential for jobs and tax revenue, residents expressed concerns about noise and air pollution, rising electricity rates and a potential to lower property values.
The company pulled its plans in late March following public outcry and a March 4 city council vote to extend a temporary data center moratorium and place a ban on Tuesday’s ballot.
In a letter to the city council, HMC StratCap said it would pursue a different use for the land and would not engage in a ballot measure fight.
The city council later banned data centers indefinitely, the first in California to do so, said Mayor Elizabeth Yang. But she’s still been out campaigning for the measure with all four other council members.
“If a council puts in an ordinance, a future council can reverse it too,” said Yang. “With the ballot measure, unbanning it is a lot harder because you need the entire city to vote on it.”
The measure proposes the ban “to protect air quality, drinking water resources, and public health” and “prevent impacts to electricity and water rates.”
While California places third in the country for existing data centers with about 300 facilities, it hasn’t been a hot spot in the recent AI-driven data center boom. High electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in Virginia, Texas, Georgia, Illinois or Arizona.
“Most of California’s data centers are small by today’s standards,” said Shaolei Ren, an engineering professor at UC Riverside who studies how to reduce the environmental impacts of data centers. “Ten years ago, they would be medium-sized, but the power demand for new AI data centers has increased a lot.”
The average operating data center demands 45 megawatts, according to the Washington Post, while the average planned one would draw 430 MW. The one proposed for Monterey Park would have required about 50 MW at peak demand.
As proposals crop up in SoCal, they’re met with fierce opposition. Montebello, El Monte and Baldwin Park have all enacted temporary moratoria, and Alhambra recently banned data centers as part of a zoning code update. City of Industry, Vernon, City of Commerce and Santa Fe Springs are moving in the other direction, trying to court developers and streamline data center approvals. Community groups are fighting that.
Outside the San Gabriel Valley, residents of Coachella and Imperial County are showing up in droves to protest local proposals.
Matthew Shaw, a volunteer with the Coalition for Responsible Data Center Development, who recently published a report on opposition to AI data centers, said a vote to ban them in Monterey Park “would lead to copycats, partially because so many groups are just opposed to any data center development at all.”
While there is no formal opposition to Measure NDC, some building trades like Ironworker Local 433 supported the Monterey Park data center when it was still live before city council. Those in the data center industry are lamenting the state of public opinion.
“These are multi-billion-dollar assets that are built by multi-trillion-dollar companies. These things will get done,” said Mehdi Paryavi, chairman of the International Data Center Authority. “My biggest problem is that our industry does not invest enough in community engagement.”
Paryavi said towns that seek to limit data centers are missing out on thousands of jobs generated by data center construction, operations and customers, as well as faster artificial intelligence speeds and better performance.
Kung said local community organizers are “looking at the empirical evidence” and seeing a ban as a win.
“We’ve never seen a city that embraces a data center and is like, ‘Look how our quality of life has increased, look how all the revenue has gone into citywide improvements,’” he said. “That just doesn’t exist.”
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