H&R Block Tax Snafu

Mar 13, 2013 by

H&R Block logo?

This may be H&R Block’s logo. Seriously. And I think this is its tagline: “____________ “

If you’re wondering why your tax refund hasn’t yet been issued, here’s one possible answer: The IRS says processing of about 10% of the 6.6 million returns it’s received that included Form 8863, “Education Credits,” have been delayed. The IRS would not say what portion of the 10% were generated by H&R Block, but the tax preparation giant has admitted that its software failed to complete properly a mandatory field on Form 8863. No other preparer has so far offered a similar mea culpa.

When Was Your H&R Block-Prepared Tax Return Filed?

Apparently H&R Block discovered and corrected the error in its software by February 22nd. If H&R Block prepared your return and your Form 8863 after that date, your 8863 should be correct, according to Block.

 

How Long Will Refunds Be Delayed?

The IRS says the issue could cause delays up to six weeks. Ouch! A posting on H&R Block’s Facebook page says “For those clients who received the IRS notice regarding form 8863 that said it would take 6-8 week (sic) to receive a refund after this issue was resolved, we are assured it will not take that long.” Assured by whom is left unstated.

Financial Aid Applicants Hit Hard?

This delayed return processing could present a particular challenge for those completing the Free Application for Federal Student Aid, or FAFSA. The FAFSA application requires entry of tax return information that can’t be completed until return processing is done.  H&R Block has been working this issue too. Again from its Facebook page:

If an affected client applies for financial aid through the FAFSA program and is waiting for their return processing to be complete in order to finalize the FAFSA application, there are manual steps they can take that will allow their FAFSA application to proceed while their return is still processing.

The Department of Education suggests:
· If your return has not yet been processed by the IRS – you can manually enter the tax return data on the application.
· Return to the online FAFSA form to update the information when your return has been processed.

Mad at H&R Block?

If you’re caught up in this unhappy affair, don’t get mad—get even. :-) What I mean is that H&R Block owes you a bit more than an apology, don’t you think? Here’s the company’s guarantee of its “Office Products and Services” from its website:

Satisfaction Guarantee: We’re so certain that you’ll have a positive experience that you don’t pay until you’re satisfied.”

I’m sure H&R Block has a stable of attorneys preparing to argue otherwise, but my simple mind would be thinking this: “I’ve already paid, but now I’m unsatisfied—very unsatisfied—and my experience is far from positive. I want my money back.” I’d call the office where my faulty return was prepared and demand exactly that—a full and immediate fee refund.

One thing I would not do is sign up for the class action lawsuit sure to follow this debacle. The result of that will be in three or four years each affected taxpayer will get about 17 cents and the class action attorneys will get about $100,000,000. Don’t waste your time, unless attorneys are among your favored charitable causes.

Club 8863

Depending on how ticked off you are, you might also want to take the time to visit the Club 8863 Facebook page. There you can blow off some steam and commiserate with other H&R Block victims customers.

What Should H&R Block Do?

Were you affected by this snafu? Should H&R Block provide full refunds of tax preparation fees to any of its customers who were affected? Would you be satisfied with this “compensation”?

Meanwhile, though the S&P 500 Index fell 0.24% yesterday, H&R Block’s stock gained $0.37, or 1.35%, to $27.71 per share.

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  • Micheal Dhane

    more than upset. Pissed off
    i want my money back and I will never us H&R empty block again.

  • Michael

    Wow. How embarrassing for them. In a business that’s based so heavily on trust (and in an industry so permeated by fear [of the IRS]) this sort of a screwup is a _huge_ deal. I wonder if/how their competitors will take advantage of this.

    • http://mymoneycounselor.com/ Kurt @ Money Counselor

      It’ll be interesting also to see what H&R Block does to try to undo the damage.

  • jim

    Yea Kurt, I’ll bet if you called H&R Block, they may try to make it up to you, this bad press has got to hurt them! Liberty Tax service should use this as a sales opportunity!! Good Post, thanks for the info!

  • Karen

    I’ve been going to H&R block for about 8 yrs. but now I’m thinking twice if I should go back again

    • http://mymoneycounselor.com/ Kurt @ Money Counselor

      My guess is H&R Block will make its customers ‘an offer they can’t refuse.’

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