## Facts

- The IRS sought to increase electronic filing by partnering with private tax-preparation companies rather than creating a government-run free e-filing system.
- The IRS entered an agreement with the Free File Alliance (FFA), a consortium including Intuit and H&R Block’s digital tax business.
- Under the arrangement, participating companies offered free online tax preparation and e-filing to certain eligible taxpayers, while other users paid fees for e-filing and related services.
- Plaintiffs Stacie Byers and Deborah Seltzer used defendants’ online services to file their 2006 federal income tax returns and paid fees.
- Plaintiffs alleged the IRS–FFA arrangement reduced competition by preventing the IRS from offering a free system for the general public and allowed defendants to charge artificially high e-filing fees.
- Plaintiffs brought a putative class action against Intuit, H&R Block Digital, FFA, and the IRS.

## Issues

1. Whether taxpayers who paid e-filing fees had antitrust standing to sue private vendors and the FFA under Sherman Act § 1 based on the IRS–FFA arrangement.
2. Whether plaintiffs could sue the IRS under the Independent Offices Appropriation Act (IOAA) or related law for allegedly unlawful e-filing fees charged by private companies.

## Decision

- The court granted defendants’ motions to dismiss and dismissed the complaint at the pleading stage.
- The Sherman Act § 1 claims against the private defendants were dismissed for lack of antitrust standing.
- The IOAA/“illegal fee” claims against the IRS were dismissed because plaintiffs lacked a viable cause of action and faced jurisdictional barriers, including sovereign immunity concerns.

## Legal Principles

- Article III economic injury (payment of fees) does not alone establish antitrust standing; a plaintiff must also plead antitrust injury and satisfy prudential “efficient enforcer” considerations.
- Antitrust injury requires harm of the type the antitrust laws address and a sufficiently direct causal connection between the challenged restraint and the plaintiff’s injury; indirect, speculative downstream price effects generally do not qualify.
- Courts may deny antitrust standing where the alleged restraint depends on complex government policy choices and the causal chain to consumer pricing is attenuated.
- The IOAA regulates fees charged by federal agencies and does not, without a clear statutory authorization, create a private right of action for consumers to challenge prices charged by private vendors.
- Suits seeking relief against the federal government require an express waiver of sovereign immunity and a cognizable cause of action.

## Conclusion

The court dismissed a class action challenging the IRS Free File public–private arrangement, holding that taxpayers who paid private e-filing charges were not proper antitrust plaintiffs and that the IOAA did not provide a basis to sue the IRS over fees set by private companies.


Byers v. Intuit, Inc., 564 F. Supp. 2d 385 (E.D. Pa. 2008)