H&R Block Goofs on Its Own Taxes 170
omar.nyc writes "Red Herring reports tax preparation giant H&R Block, manufacturer of TaxCut and other tax software, goofed on its own taxes. The miscalculation on its state income taxes are liable by $32 million. This will reduce Block's fiscal year 2005 earnings by $0.02 per share and $0.02 per share in fiscal year 2004." From the article: "Besides the problems that Block had with its own tax prep needs, the company also experienced difficulties with the technology in its offices last month that hit its bottom line early in tax season. 'Technology problems across the H&R Block network in early January impacted our ability to serve clients in those crucial early weeks,' said Block Chairman Mark A. Ernst. He said the problems had been corrected, but they impacted the company's ability to serve 250,000 clients at that time of year."
uh oh (Score:2)
Use a professional tax service (Score:4, Funny)
Re:Use a professional tax service (Score:2)
They did; they used Jackson Hewitt!
Re:Use a professional tax service (Score:2)
Re:Use a professional tax service (Score:2)
From that day on, I vowed I would never have my taxes done by them. Now I'm almost tempted to out of sheer laziness.
So? (Score:2)
Re:So? (Score:2)
http://biz.yahoo.com/bw/060223/20060223005898.htm
This only really matters if you can do something with the information. Between the time that this news came out and the end of market close on Friday, the stock dropped 8.6%.
This might have mattered on Thursday.
Re:So? (Score:2)
other than that, it definatly should have gotten the foot, because thats the only reason I'm here
Re:So? (Score:1)
Tax Instant Refund Scam; Loan, not Refund (Score:5, Informative)
http://www.hrblock.com/ [hrblock.com]
"Fast Money
Walk into an office with your taxes, and walk out with an Instant Money Refund Anticipation loan check. Up to $9,999 based on your refund amount. Money in your hands fast."
People, don't ever EVER get your tax refund this way. You may be in a financial jam or just impatient to get your money, but this is sure way to loose your money in a blink of an eye, and possibly the most stupidist thing you can ever do. The % you loose due to interest rate for loan in this case is highly unregulated and its easy to get scammed.
Here is a quick article on pending lawsuit against H&R Block in California, posted on MSNBC.
http://msnbc.msn.com/id/11373754/ [msn.com]
Just wait 3 weeks and get your full refund (if you don't owe that is), or ready to get charged 500% on that refund.
Misleading (Score:1)
So as you can see, H&R block did nothing wrong. Nothing to see here.
Refund Anticipation Loans (Score:2)
With the help of large banking institutions like BankOne [bankonetrp.com], mom and pop accounting businesses can offer R
Re:Refund Anticipation Loans (Score:1)
Every refund application that fails completely is one less bit of tax I have to pay (in theory).
Re:Refund Anticipation Loans (Score:2)
Re:Refund Anticipation Loans (Score:2)
Re:Refund Anticipation Loans (Score:2)
I'm sorry. I've developed tax software for the last 15 years and I guess I assumed that you would understand that there is a difference between the $39.95 tax software you buy at Staples and the software [google.com] a small firm might use to process 500 or more returns per day. If you still think the free stuff is good enough, then just for fun, go figure the tax on a wash sale or calculate depreciation on all your office equipment using the MACRS/MQC method (assuming you've
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
Why wait when E-filing cuts that time in half.
My Tax Preparer (an independent, no national chain) had an option to E-File direct deposit into your personal checking account. I usually get my refund back in less than 2 weeks, this year I got it in less than 5 days, which is the fastest I've ever seen it come back. I've also found that the earlier you do your taxes the faster it seems to come back.
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
I usually get my refund back in less than 2 weeks, this year I got it in less than 5 days, which is the fastest I've ever seen it come back.
E-file batches are processed on Thursday. If your e-file is accepted in the Thursday batch you should get your direct deposit by the next Friday. There's a table in this publication [irs.gov].
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
That way, you have your money all year long, instead of waiting for a refund - or paying money to get an e-file, or even worse, paying fees for a refund loan. You can do your taxes at your leisure and pay the small amount you owe whenever you feel like it.
Why let the government have your money any longe
Re:Tax Instant Refund Scam; Loan, not Refund (Score:3, Interesting)
Yes, there is a fee associated with doing their taxes, and there is a fee to get their 'instant refund' - but you saying that they are 'charging 500% on that refund' is just sensationalizing the event.
Charging 500% means charging $500 on a $100 refund - that is not what is happening here.
They (and by proxy, you) are using voodoo math to come up with scary numbers but hiding t
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
The ONLY three reasons to have a "professional" do your taxes are (1) you're getting a sizable refund and want a RAL, (2) You're of below-average ability when it comes to numbers, and need someone else to do them, (3) you're a homeowner, a business owner, or make enough to hit the A.M.T.
For all the rest of us, H&R block is a scam. If you passed high school, you can pay your taxes. If you have kids or go to school, there are a small handful of tax credits you care abo
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
Not just talking about H&R Block here. Anyone, from H&R to their competitors to CPAs, is covered here.
Not just numbers, but tax law... It's also a matter of whether or not you have the time to carefully read the forms.
Yo
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
For vanilla 1040EZ filers, there's no real reason to go - unless they totally had no clue about the EIC (which I didn't), or maybe there was some abstraction in the tax law that would work in their favor in a strong way
Case in point - doing a little 1099 work, I used my car occasionally on business. Not enough to warrant getting a business car, but enough to warrant keeping track of the mileage and w
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
And $9.96 to get H&R's "Taxcut" software from Walmart (http://www.walmart.com/catalog/product.do?product _id=4347458 [walmart.com]) if you can't handle the questions and the math. It even does a decent job if you own a house, go to college, adopt a child, etc.
Yep. I hate the W-4, and the pre-calculator way income taxes are withheld in genera
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
According to the US Census Bureau, homeownership rate has been no lower than 62% nationwide [census.gov] for the last forty years.
Which, all told, may still mean that about half of tax-filers can't deduct mortage intrerest, either due to owning their home outright (rare for the lower-income set, unfortunately) or due to being a secondary-wage earner not married to the homeowner. I.e., a kid at home, like the kind of guy sitting down reading
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
Well, the APR that's usually calculated is based solely on the fee for the RAL. And if you call it an APR there's nothing voodoo about the math, that's how an APR is calculated.
Yes, H&R Block will often get people more money, even after fees, than they would have gotten on their own. But they're still sleazy people for the most part. I took the H&R Block tax class, though I wound up working for myself and now for a CPA firm. The woman who taught the class told us about how she would help the pe
MiB (Score:2)
Uh, no. The *hard drive* manufacturers started using decimal units (which, while obviously unintuitive and irritating and profitable for them, does at least make SI sense).
Other people who wanted some degree of consistency (and not two different types of "MB"), pushed for the use of "MiB".
You want to blame someone, blame Seagate, not the IEEE.
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
Good god, I thought the bullshit had been stretched thin as it was.
The poster you responded to does have a point -- "refund anticipation" loans ARE often ripoffs and it's a good idea to avoid them unless you REALLY REALLY need the money now. I filed in early February and I had my refund on the 13th. My full refund. (though I did have to pay a little for the state filing/prep and the fed prep, fed E-file was free for me). If you are smart enough to plan ahead financial
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
The note in your sig is pretty cool - I actually had a chance to see the Soviet Space Shuttle back in 1993, from a fairly close distance (static display, riding piggy back on the back of a jumbo jet, as I recall.) I didn't fully appreciate what I was seeing, but given that I got my hands on a MiG31 (ok, I touched it with one hand) and a MiG29, saw the Hind and Hokum fly, and had a few minutes to stare into the ginormous engines of a MiG25
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
It was over a decade ago, so details are pretty fuzzy.
Unless I wasn't su
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
By comparison, the US shuttle is carried around by a Boeing 747, which was not originally designed for this purpose (it was designed as a competitor to the C-5 Galaxy and as a passenger hauler, and turned out to be a good shuttle carrier with internal modifications and additional vertical stabilizers added to the tail surfaces). The two SCAs were sourced fr
Re:Tax Instant Refund Scam; Loan, not Refund (Score:2)
Old news (Score:1)
Place the blame where it is due... (Score:4, Insightful)
Personally, I don't see how anyone can reasonably expect to avoid becoming a criminal with more laws on the books than can possibly be read in a human lifespan. I am completely unacquainted with 99% of the laws in this country, and for all I know I may have unwittingly violated a fair portion of those.
The law should be terse enough for Joe Schmoe to learn it all in a high school class or in a few weeks of diligent study. Anything more is just plain unreasonable.
Re:Place the blame where it is due... (Score:1)
Needless to say, that didn't turn out to be such a bright idea.
Re:Place the blame where it is due... (Score:2)
As for the average joe I will quote a taxi driver from the middle east I once saw on TV. "The govt lets us cheat a little on our taxes so we will look the other way when they cheat us a lot".
Re:Place the blame where it is due... (Score:2)
Sure, rich, powerful corporations want to game the individual income tax system...
The real reason the tax code got the way it is, is because we have a congress made up of lots of people, and some of them want to use taxes to influence behavior, others want to use taxes to redistribute wealth, and yet others want to be able to point to a narrowly focused tax
Re:Place the blame where it is due... (Score:2, Interesting)
I'm a lead at an Intuit (TurboTax) calllcenter, hence the reason why this is me being a coward.
And even though some people over estimate the complexity of taxes, they aren't that extreme. For most people, what they enter is not entirely complicated by a significant degree. Hell, most people only need to fill out a 1040EZ, (while yes, I know that a deal of
Re:Place the blame where it is due... (Score:2)
Unless you are paying diviends or interest, you don't need to fill out a 1099-DIV or 1099-INT - you get those from someone paying you - and they need to go on the 1040 schedule B (if you've got enough of them). 1099-R's come when you are taking a distribution from your retirement fund - and that's a bad idea if you're younger than 60 (unless you like giving the
Re:Place the blame where it is due... (Score:2)
That said, I believe the AC was implying that the majority of the population never even gets these forms. At worst, they might have a 1099-int from a savings account.
So the proposed "majority" has to fill out a 1040ez, with information from one or two w2's and a single 1099-int.
I don't know how representative that is, but I'd say that it is at least plausible that a lot of US taxpayers have taxes that simple. It would certainly cover
Re:Place the blame where it is due... (Score:2)
I'd also say that it doesn't take much to go from an easy return one year to a difficult one the next. Divorce, buying a house, selling some stock, having a kid - all of those things add to the complexity of the return.
And if you do a little side business for yourself after hours, watch out :)
Re:Place the blame where it is due... (Score:2)
That's not always the case. There are various reasons you can take money out of a 401k/403B that don't incurr penalties, even if you are younger than 60. For example, I pulled out some money to help keep me in school full-time. You still have to treat it as regular income. In my case, I didn't pay a
Re:Place the blame where it is due... (Score:2)
BIG, BIG, BIG issue (Score:2)
Personally, I don't see how anyone can reasonably expect to avoid becoming a criminal with more laws on the books than can possibly be read in a human lifespan. I am completely unacquainted with 99% of the laws in this country, and for all I know I may have unwittingly violated a fair portion of those.
This is a really BIG picture issue.
Not some trivial idiotic shit, like do we build a windmill farm on Ted Kennedy's Hyannisport compound, or how do we save the snail darter by driving the Klamath Farmers
Simplified law (Score:2)
This doesn't apply to some large (and important) chunks of law, like tax law. However, it does help.
Sometimes, however, there are things that are counterintitive, and in civil law, things are less clear (which affects trademarks, copyright, employment contracts, etc).
For example, "Suppose V is drowning. D, an O
Re:Place the blame where it is due... (Score:2)
Hah! Good luck. Sales taxes aren't progressive. You can't sell a tax to the public unless it punishes the rich.
Re:Place the blame where it is due... (Score:2)
Re:Place the blame where it is due... (Score:2)
That doesn't work, because you can't force rich people to spend all their money.
Re:Place the blame where it is due... (Score:2)
Under your scheme, you're hardly making the rich pay more if you don't though.
Re:Place the blame where it is due... (Score:2)
Re:Place the blame where it is due... (Score:2)
Re:Place the blame where it is due... (Score:2)
You misspelled "unless it expects those who receive the most benefit from our society to pay the most for those benefits.
Re:Place the blame where it is due... (Score:2)
If I assume that you're saying that 'punish' was the wrong word, to that I would say that a tax doesn't need to be progressive to cause the rich to pay more than those who aren't rich.
Or should I say that you misspelled "pay disproportionatly more for those benefits"?
Re:Place the blame where it is due... (Score:2)
I was saying the opposite, in fact.
Somebody who has never worked a day in their life, who spent all their welfare on crack and had 18 kids while doing it has still received *far* less benefit from our society than Bill Gates for example.
That's simple to see. Simply declare that for one week, no societal protections of any sort whatsoever will apply to either of them.
Lets see who loses the most and who ends up dead first.
This
Re:I'm not yet old enough ... (Score:2)
It's wrong to tax the money that people need to survive. So calculate the cost of living in their region, and that is their deduction. All other income is taxed at a flat rate.
It's easily done (Score:1)
Re:It's easily done (Score:2)
That might be; but, how many of them do most companies actually use? No doubt companies make similar (if not worse) mistakes every year. However, we'd usually expect more of a company who's business is to understand the tax laws to generate reliable and accurate documentation for those of us who don't understand (or want to understand) how to do our own taxes. If they can't even get their own taxes right, why sho
They must have used TaxCut State (Score:2)
When I told it I was a part-year resident (awfully common for young people who move a lot) it simply told me to hunt down (on my own) and fill out a series of Ohio tax forms and then feed it the results after I'd done practically all of the work manually! The
So what? (Score:2)
Company taxes are a whole different thing. The rules are different, are more complex, and change often. In many instances, the rules are somewhat rubbery, but what you can get away with will come down to how good your lawyers are. Also, while H&R Block staff do the taxes of hundreds of thousand of people every year, their accountants only do the company taxes once a year. Mistakes are likelier.
Re:So what? (Score:2)
Just a common error? (Score:2)
Just tell that to Enron.
Re:Just a common error? (Score:2)
Just tell that to Enron.
Okay, how do you accidentally create a bunch of shell corporations, sell to them, and call that revenue (or was that another company?)? Woops Cali, sorry about your energy crisis. Bookkeeping error, don'tcha know.
Tax simplification (Score:2)
A friend pointed out today that if the typical American worker wastes a single day on taxes, that's hundreds of thousands of man-years wasted every year.
Re:Tax simplification (Score:1)
Re:Tax simplification (Score:1)
How much is your car worth today?
How much is your pc worth today?
How much is that bright idea that you just came up with, but haven't checked with the patent office today?
Et cetera.
Flat Tax! (Score:3, Interesting)
Unfortunately, reformers are split between the Flat Tax and Fair Tax [fairtax.org], aka national sales tax. The problem with the Fair Tax plan is that it will require the
Re:Flat Tax! (Score:2)
What we really need is a truly progressive income tax, on a sliding scale based on income, with as few holes as possible and a concerted effort to plug any that pop up.
I'd say a sliding scale from 0% to 95% would be about right. A person making less than $15k/yr would pay 0%, bill gates would pay 95%, and everybody else would pay somewhere in between.
That would be a truly fair system.
Re:Flat Tax! (Score:3, Interesting)
Re:Flat Tax! (Score:2)
You see, the wealthy benefit much more from the protection of government than the poor and middle classes. They should have to pay more. And the top 5% of earners should have to pay MORE than 54.36% of taxes.
And I'm sorry, the "Fair Tax" concept WOULD be a gift to the weathy. Only a tax on wealth can be fair.
Re:Flat Tax! (Score:2)
Re:Flat Tax! (Score:2)
You're not looking for a tax system to fund government, your're looking for a way to transfer wealth from those have earned it to those who have not, all in the name of equality of outcome. That is not fair. That is government theft so you can sleep better at night, knowing that everyone life sucks equally.
Someone's got to pay for all the stuff the government does, and Bill Gates is far more able to do so than the janitors in his campus. 95% is a disaster waiting to happen, but 40% is doable (he pays no
Re:Flat Tax! (Score:2)
1) Rich people pay more money in taxes because they have more money to pay. You mention
5% of income earners paid 54.36% of the income taxes
but this statistic is meaningless since we don't know what % of the wealth these top 5% have (ie 10% of $100 is twice as much as 10% of $50).
2) Rich people are able to leverage their money to a much greater degree than poorer people. At the lower end of the scale this means things like being able to afford university or maybe just affording a comp
Re:Flat Tax! (Score:2)
The FairTax is progressive, because of the universal rebate. Most flat tax plans also have a large standard deduction so that those with low incomes pay zero or negative net taxes. And both could get rid of FICA which is the most regressive tax we have.
Re:Flat Tax! (Score:2)
Re:Flat Tax! (Score:2)
No problem, we could switch over to the Flat Tax very quickly. Take your income, subtract your personal and dependent deductions (well over $40K for a family of four), and pay a percentage of what's left (usually 17% in American proposals). Besides saving $billions in labor, it will likely increase compliance as it will be less worthwhile to dodge it.
A graduated tax is not really any more complicated than a flat tax. OK, you need to make 3 calculations instead of one (or use a table), but that's really
Re:Flat Tax! (Score:2)
Totally flat tax. Seventeen percent. Starting at the first dollar.
Yes people go all crazy with deductions for children, married vs single, standard deduction, graduated tax rates, all that jazz - but boil it all down and look at the real taxes you paid (assuming you had a real income, not on the bottom or top 3% of the scale making zero or millions) and I will bet that you paid somewhere in the very tight range of 16% to 18%,
Re:Flat Tax! (Score:2)
Cause if you don't your gonna wind up with a Fair Tax AND an income tax. Allowing congress to do something is practically inviting them to do it. Especially if it gets them more money to spend.
no mortgage deduction? (Score:2)
If you were to move to something like that, you'd have to phase it in VERY gradually.
Re:Tax simplification (Score:3, Interesting)
Something like "plug in total assets and total change in assets since last year, and find tax".
...which probably wouldn't have helped out H&R Block at all, because they miscalculated their liabilities (which I assume you're going to have to subtract from assets anyway).
Congress could certainly simplify the tax code in a few ways (get rid of the credits and some of the more esoteric deductions, move the rest "above the line", eliminate the phaseouts, and then probably raise the standard deduction and
they impacted the company's ability to.. eh? (Score:2)
Next time they'll learn (Score:1)
Nice! (Score:1)
The folly of corporate taxes (Score:4, Insightful)
Watch politicians. They will consistenly play up the fact that corporations don't pay their fair share while conviently relying on the fact that any taxes paid by a corporation are paid by its customers. It is this embedded taxaxtion that hides the true amount of tax load that is place on every citizen of the country. The best time to witness the hypocrisy of Congress is when certain corporations report their profit. The Congressmen will make big speeches about how all that money is being "stolen" from the American people and that the profits are obscene whereas the only obscenity is Congress's appetite for OUR money. They love to ignore the profit per share which is the true measure of a corporations profitability all because they know most Americans are ignorant of how the system works.
The system is made so complex to keep the dirty little secret from being easily identifiable. If the Congress and Administration were truly after true tax reform they would make the system transparent. This can be done in one of two ways. A flat tax or a National Sales Tax (aka The Fair Tax). While neither system is perfect they both offer something that the current system doesn't and that is transparency.
Besides being overly complex, which results in hundreds of billions from individuals and corporations to stay in compliance, it is chocked full of exceptions for every little group that manages to bend Congresses's ear. They have created a self sustaining system. Groups give money as gifts and reelection money to maintain their status. None of them have the people's intrest in their hearts, not Congress, not the Administration, and certainly not these groups.
It is a total fraud.
Re:The folly of corporate taxes (Score:2)
TFS said: admitted it had miscalculated its own state income taxes
Yet for comment is entirely about Federal Tax Law; something to whcih this story is not even related. It is about the tax laws of the state of California. Furthermore, TFA doesn't even
Re:The folly of corporate taxes (Score:2)
There is no such thing as corporate taxes. They are tax collectors. Where do you think the money comes from that they pay in taxes? The people using their services. So, every thing you buy (Service/goods/etc) has a tax in it that you cannot see. This is nothing about trickle down economics. Trickle down economics would not be a viable solution to many issues if the system wasn't built upon it. The current system is meant to keep people ignorant of just how much tax th
"Editor"... Didn't that used to mean something? (Score:1)
Ummm, guys, that is NOT how the English language works.
H&R Block is screwing franchises (Score:2)
Also, they are now insisting that they set up theese dinky Wal-Mart kiosks. Yes, they might get extra revenues, but franchise holders who already are running at full capacity are forced to take on more than they can handle.
H&R block
I use that "crappy" software by choice... (Score:2)
Can you recommend a browser-based piece of software that is better? I have to admit I don't exactly explore all options each year, so maybe I'm just missing the better options.
Re:H&R Block is screwing franchises (Score:2)
Create a browser based application that has been thouroughly tested by user interface professionals, not just their tax lawyers and software engineers.
I've got news for you: UI professionals are software engineers. Only problem is that sometimes they use the wrong software engineer to build the UI.
Re:H&R Block is screwing franchises (Score:2)
Re:H&R Block is screwing franchises (Score:2)
Browser based apps rule.
Is it really a mistake? (Score:2)
No data sharing @ HRBlock (Score:2)
not too surprising, given the quality (Score:2)
Me: The online state tax interview is stuck in an endless loop.
HRBlock: Please wait for your state product to be available, then choose it, and complete it. Enjoy!
Me: Um
HRBlock: Use the jump menu to jump to any part of the interview. Enjoy!
Me: Is this thing on? It won't let me jump past income, but that's
Re:Technology problems (Score:2, Informative)
This is a classical corporate decision making screwup.
HRB has for the past number of years distributed its tax prep. software* for its offices via CDs. Naturally given the nature of tax prep. software there are numerous updates over the course of the tax season.
(You realize of course that lots of federal & state tax changes & forms come down through November & December, but even as of Jan 1st of any given year, neither the IRS
Re:Technology problems (Score:2)
by flug (589009)
I apologize for posting AC but as you read below you'll see why . . .
Whoops!
The Preview Button if your friend.
Re:H&R Block and it's barely trained monkeys (Score:2)
So now I have an accountant. I mail him all my crap