Avoid Big Name Tax Places

We haven’t been getting many complaints about tax places this year but as far as we know, they still suck. They’re known for messing some people’s returns up pretty bad, or encouraging people to take questionable deductions. Like making up a child, for instance. Here’s a walk down memory lane, a lane that’s definitely shady…

US Government Sues Jackson Hewitt Alleging “Pervasive Fraud”
Costlier Tax Preparers Encourage More Fraudulent Returns
Avoid H&R Block, Jackson Hewitt, Says Accountant
Elliot Spitzer Sues H&R Block for Tricking Customers
H&R Block Gets Man in Tax Trouble, Doesn’t Care
H&R Block Leaves Guy With $3100 Bill

Results may vary and there are certainly good franchise locations for each of these places, but you’re probably better off getting a referral for a good accountant (although by this point, any accountant worth his salt is probably booked up), or using TurboTax to do your taxes yourself. — BEN POPKEN

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  1. FreakyStyley says:

    My dad works part-time for Block during tax season as a side gig because he enjoys it. Free tax prep, plus I know he’s competent :)

  2. Chongo says:

    I used the free online version of turbotax (found through this websites link to governmental tax help). It was a long process but overall it was easy. It took about 2 1/2 hours to complete and it filed it for me. In fact I got my check within 2 weeks. YAY! 17 bucks!

  3. cmac says:

    Use Turbotax if your return is straight-forward. If there’s anything complicated, find a CPA. I used Turbotax last year ($60), screwed up my returns (no, I’m not an idiot), and must now file an amended return (and pay dearly). My (new) accountant charges by the hour and IF you’re organized, it won’t cost that much more than using Turbotax.

  4. deletethisaccount says:

    I used the free Tax-Cut download posted here in March. It worked really well didn’t care that I wasn’t connected to the Internet or try and hit me with overwhelming advertisements (all of which I expected when I installed it), heck I’ve seen a larger amount and more intrusive ad’s from store bought software. When I installed it I really thought it would be uninstalled within minuets of the first use. I ended up using it despite the H&R Block logo (which to me would have been enough to make me pass, had it not been posted here) and then doing them again manually (without looking at the Tax-Cut results and had the exact numbers it did. Now the disclaimer, my taxes are pretty straight forward with the basic stuff a married homeowner with no dependents to claim.

    But as to the actual content of this story, I would never use any Big Box tax service myself.

  5. mantari says:

    I used to use ‘big name tax places’ myself. But I think I caught on to how much I was being screwed when it came to the interest on my student loan.

    I told them that I make too much money to claim it on my taxes. They wanted to see the interest form anyhow so that they can plug it into their computer and ‘make sure’. Result? A nice fee (forgot — $10? $20?) for processing an extra document to tell me what I already knew. I make too much money to claim my student loans on my taxes.

    At this point, the web based software is sophisticated enough that I believe it’d do just as good of a job, if not better, than the form monkeys who were just typing those very same things into the computer on my behalf.

  6. cgmaetc says:

    H&R Block did my taxes my first year teaching. I owed the IRS like $600. The next year I found a reasonable CPA who amended my H&R filing: turns out the gov’t owed me about $2000, because of classroom write-offs and education credits the H&R rep neglected to include.

  7. G.Quagmire says:

    If you have simple taxes, please do me a favor and avoid H&R Block. I went there with my girlfriend yesterday to get her taxes done (she had never had anyone do her taxes before). Last year, she was a student and only had about $12k in income, basically the simplest possible tax return. The *only* non-standard things were that she had to file state returns in two states, had more than one W2, and had some 1099 income. We walked in and sat down with the guy for maybe 30 minutes while he filled in the blanks on his one-size-fits all tax software. The up side was that it took only about 30 minutes. The downside was that it cost, wait for it, $390 !!!!! Just as a comparison, I’ve been using a “real” CPA for the past 5 years who does my much more complicated return for about $50 less. I could have done my girlfriend’s taxes myself, with Turbo Tax, in maybe double the amount of time it took the H&R Block guy, for virtually free. H&R Block is a TOTAL scam.

  8. Anonymously says:

    The people at H&R Block just use a Tax Cut like software package themselves, except they’ve actually had training on taxes, unlike most people. So I highly doubt that using TaxCut on your own is going to give you a better chance of not screwing up than going to H&R.

  9. fonzette says:

    Seriously, who would pay someone to do their taxes? Unless maybe you’re self-employed; otherwise, it’s a total rip-off to pay someone to for that. The internet will even do the calculations for you, for pete’s sake.

  10. ngwoo says:

    I’ve used Block before, and didn’t have any problems. It was cheap, too.

    Bad apples I guess.

  11. Ah'm Tha Sharaff says:

    Sheezh. I don’t know how much H&R Block costs, but I suspect you get what you pay for. How much does it cost to use them? I pay an accountant $125 to do my taxes and I’ve got the confidence of knowing a licensed professional is helping me out and answers to me if something goes wrong. I’d be afraid to pay any less to “tax preparers” of unknown credentials.

  12. freakinalex says:

    I would avoid H&R Block just because their slogan, “You got people,” is grammatically incorrect.

    Then again, I guess that’s why they specialize in taxes and not publishing literary criticism or something to that effect.

  13. Theseus says:

    fonzette–For those of us with more complicated taxes (stock options, a few different types of equities and investments, commissions) doing it yourself is pretty risky.

    That said, why go to a big box when a few minutes of word-of-mouth investigation will get you a list of reputable accountants?

  14. jamesdenver says:

    Agree with Theseus. A few years back I went into and H&R Block and walked out after the guy got stuck on a pre-formatted dos based PC form, something I could be doing myself. I’ve used turbo tax for the past two years (my income/expenses are pretty simple), but before that I used a little old lady recommended by a co-worker.

    My recommendation, like the above, use references: walk over to your accounting department at work, ask who THEY use. You’ll end up going to some ladies house with a bunch of forms on a card table and she’ll charge you $35-$100. Easy, efficient, trustworthy.

  15. britne says:

    This was our first year owning a business, so we went to H&R Block for some help with that. But after reading awesome posts like these on Consumerist, I realize that there were a whole BOATLOAD of deductions we should have taken, and that we even told him about, and the guy didn’t do it.
    So, do we have any recourse? Can we file another return, and get the rest of that money back? Can we make H&R Block re-do the taxes, since they basically blew us off? Help!!!!

  16. jgpenzen says:

    Used Block for 5 years now and never had a problem. The key to success is to find the retired accountant who is works there part time during the tax season.

  17. mantari says:

    @britne: Yes. You can file an ammended tax return, after the fact.

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