A reader recently wrote about a problem he was having with the Premium edition of TaxCut. “I wrote a letter to H&R Block because their program froze upon re-opening the file and lost the data on a return I had just finished,” says the reader. “I actually believe this freeze is due to a known bug where their forms getting corrupt, and it will hang upon opening, and require a re-download or re-installation. But the website says nothing about losing data. Well, I reinstalled the software and my hours-of-work data was lost, so I wrote to them asking if the data was recoverable. Their reply was short and accusational, and avoided answering the question. But they did manage to inform me that this is not a tool that paid preparers are allowed to use.”

H&R Block’s technical support noted in their e-mail to the reader that he had said he was using TaxCut as a professional tool. If this was the case, they told him, he was violating the TaxCut End User License Agreement. They quoted the EULA as saying:

“You may not: (i) distribute, give, rent, loan, or resell a copy of the Software to any other person;.. . You also may not use or access the Software to prepare or file tax returns for any other person for a fee or other consideration, and you agree to indemnify Block against any claims, costs or expenses relating to such use or access. (ii) use the Software in other than its intended manner or for the benefit of any third parties, including by making the Software available on an application service provider, outsourcing or service bureau basis, or on any peer-to-peer or file-sharing service or network, or by using or accessing the Software to prepare or file tax returns for any other person for a fee or other consideration ..."

Technical support, the reader was told, was not available to those who violate the license agreement. The reader wondered why H&R Block hides this usage restriction in its license agreement rather than prominently informing prospective customers that they can’t use it if they are paid tax preparers. In fact, he noted, the Premium edition even provides tools to help tax accountants. “So tell me then - why do they include a billing invoice and a client letter in their forms for paid preparers, along with a worksheet to put in the paid tax preparation business's hourly rates and per-form fees, sales tax, and discount rates?” he asked.

By the way, TurboTax has long had a similar provision against paid preparers in its license agreement, but I’m not aware of any attempts Intuit has made to invoke it. Are such license terms legally enforceable? It’s hard to say, at least outside of Virginia and Maryland (the UCITA states). But I would think most courts would expect any such restriction on who can use a product to be prominently displayed rather than buried in the sneakwrap.