H&R Block Flubs Own Taxes!!

“i found this rather amusing

H&R Block Flubs Its Own Taxes
Friday, February 24, 2006

CHICAGO — H&R Block Inc. (HRB), which provides tax advice to millions of Americans, made an embarrassing confession on Thursday. It goofed on its own taxes.

The company, which is in the middle of its make-or-break season preparing other people's tax returns, said it had underestimated its own "state effective income tax rate" in previous quarters — meaning it owes another $32 million in back taxes.

As a result, H&R Block said it would restate previously reported earnings going all the way back to 2004.

"It wasn't particularly material," said Alexander Paris, an analyst at Barrington Research in Chicago. "And it's not particularly unusual. A lot of companies are going back and reviewing their controls because of Sarbanes-Oxley and finding tax errors. But for a company like H&R Block, it was particularly embarrassing."

http://www.foxnews.com/story/0,2933,185912,00.html”

“ouch.”

“I bet they won't be doing the double your tax refund deal next year.”

“Their do it yourself DVD thing for CT state taxes didn't compute correctly either. It didn't inform or allow property tax deductions to some.

It was in the paper today that you can download a patch.

I guess that's if you read the paper you can download the patch.”

“all software programs, even the ones that the big CPA firms buy and use release patches and updates up until about mid march or early april.

Also, for the laymen, there is very little connection, if any, between the "State Effective Rate" that is used in preparing the financial statements for H&R Block and the actual tax computed on the tax return for the Company.

Has to do with the timing of recognition of items of revenue and expense for financial statement purposes vs. the timeing of recognition for income tax reporting purposes. Two different sets of rules.

In essence they screwed up their financial statements, not their tax returns.

But it is rather amuseing, all the same.
last edited: 2/24/06 9:48:48 PM”

“I realize that all programs have patches but this only came to light because someone that used it knew that he should get the deduction.

No on knows yet how many people have already filed and did not know. Or if they read the paper or registered their product to find out about the patch.”

“most patches and corrections come as a result of user input. It is a dam shame that lots of people missed out on a valid deduction though.”