H&R Block Says It Does Not Refuse Tax Returns For Same-Sex Civil Unions

H&R Block recently got into trouble because when a Connecticut same-sex couple tried to file their taxes through H&R Block’s website, the system spat back, “”We don’t support Connecticut Civil Union returns.” One of our readers wrote H&R Block about our post and their VP of Marketing actually wrote back to him to describe what she felt was media sensationalization of the story. She says that the problem happens because the Federal government doesn’t recognize same-sex civil unions. The information for state tax returns gets inputted based on the federal, so in this specific case, it’s not “flowing” correctly. It sounds like they’re working on fixing that, though. Here’s her email in full:

Your email was sent to me and I wanted to respond to you personally. We do not refuse to prepare tax returns for gay and lesbian couples. Unfortunately, we are a public target of some pretty nasty allegations that are not true. I believe the media and other like to sensationalize issues. Here is what is really going on…

The federal government does not recognize same-sex civil unions for the preparation of federal income taxes. However, Connecticut has recognized these civil unions for state taxes. In our online tax program, TaxCut, the federal tax return programmatically feeds the tax return information into the state tax return. Since the federal return can not be filed as a same-sex civil union (like a joint return) the correct information is not flowing to the state portion of the tax return to file a same-sex civil union state return. In this instance, like any other area that may not be handled well with the online program, we provide some guidance that our H&R Block tax offices will be able to assist you with your return. In general when we have complicated tax return situations, we feel that the best outcome is to have one of our tax professionals assist the consumer.

We are accused of is discriminating against same-sex civil unions because we presented the option of visiting one of our offices. Our competitors recommend that three returns be prepared (two individual returns for the federal return, and then a “proforma” return where the information is combined for the federal return that will feed into the state return. The customer is instructed to print the “proforma” return and mail in the state return). We have the same workaround available in our online and software products. Additionally, we have offered to refund the price of the “proforma” return so that the couple is treated financially on parity with a married filing jointly couple. Our competition does not offer the refund or parity pricing with a married filing jointly couple.

I want to assure you that we do not discriminate against any individuals and value all our customers. We do not refuse to prepare tax returns for gay and lesbian couples that live in US states where their marriage is recognized. We are in fast offering a better solution than the competition for those customers.

Please feel free to email me directly with any other questions.

Warm regards

Paula Drum
Vice President, Marketing
H&R Block

That makes sense. Still, you would think that would be the kind of thing you would want to test for before tax season. Someone should have said, “Hey, Connecticut is allowing those crazy gay civil unions for tax purposes, let’s see if our software actually lets people do it.”

PREVIOUSLY: H&R Block Doesn’t “Support” Gay Civil Unions

(Photo: Ben Popken)

Comments

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  1. SkokieGuy says:

    I think that is a reasonable and fair reply. When the original post came out, some of us calmer readers assumed that “do not support” was a reference to software and programming issues, not H & R Block’s corporate stance on same sex marriage.

    On a personal note, PLEASE tell me that 2nd to last sentence, “….are in fast [fact] offering….” was a typo in the original letter? I’m the marketing guy at my tiny company and if so, I maybe I can feel just a wee bit superior to Block’s Marketing VP. Yippee!

  2. plustax says:

    Nope, still unforgivable H&R Block Tax Service! I highly recommend every boycott H&R Block Tax Service immediately and make sure to tell all of your friends and family members to avoid the evil people or H&R Block Tax Service. I can’t believe how horrible H&R Block Tax Service is even after reading their apology.

    Now, if you’re looking for a good CPA you can call…

    (That wasn’t that too self serving was it? :)

  3. Sir Winston Thriller says:

    Well, they could do what Turbotax does for Vermont. Civil union couples have to redo a federal return as if they were married filing jointly or married filing separately, then do the State return with Civil Union Jointly or Civil Union Sep. then send in the real federal return, the fake federal return, and the state return.

  4. choinski says:

    As a same-sex married couple, we are required to file in Massachusetts jointly, while similarly forbidden to do so on the Federal level. We get out taxes prepped professionally to be on the safe side (Gay CPA with similar clients.) We end up paying double for the tax prep (we’re still treated as two individuals filing) but the silver lining out of the Fed’s bigotry is we end up avoiding the Marraige Penalty – and get a much fatter refund.

    As an aside I used to manage H&R’s presale database. It is a very odd industry. It is one of the consistently top 10 software titles, yet you can never upgrade. Its re-written each year with the new tax laws, which aren’t finalized until only a few months prior to the season. So the challenge is to write the software and mass produce millions of units only weeks ahead of when its needed, and you sell 90% of the inventory it in a single quarter.

  5. bohemian says:

    Here is the real problem:
    “We don’t support Connecticut Civil Union returns.”

    Support has two common meanings. One being support as in the IT world of supporting software or hardware. The other being the concept of approval or agreement with something as in “Focus on the Family does not support civil unions”. The second being the idea of being cooperative or uncooperative with something.

    HR Block used a very poor choice of words. Someone in the software project process someone should have caught that and changed the wording. So the fact that they didn’t tells me that they are either sloppy in developing their product or sloppy because they rushed it to market. Same goes for the lack of software than can deal with state civil union returns.

    HR Block deserves this who mess of bad PR. They were sloppy and created their own mess. Now they have egg on their face.

  6. lizk says:

    @bohemian: I agree. Now that we have the background, I think the larger problem is the error message, though H&R Block really should have done the work to prepare their systems to support (in the IT sense) returns for same-sex couples. Consider the difference in the actual error message and my suggested error message below:

    “We don’t support Connecticut Civil Union returns.” (H&R Block)

    “We’re sorry. Because Connecticut Civil Union returns are still fairly new, we haven’t had time to build them into our systems yet. We want to help you with your Connecticut Civil Union return, and we recommend you call your local H&R Block office to set up an appointment. We’ll be happy to help with the new return filing process. The phone number for the closest H&R Block office is XXX-XXX-XXXX.”

    That took… oh… 20 seconds to write up after figuring out what the issue was.

  7. mgy says:

    Would be a lot easier just to legalize gay marriage and be done with this annoying tax confusion business.

  8. bunch.of.wackos says:

    Agree with mgy
    but considering what is exposed by choinski, (if true) from the
    developer poin of view it is a nightmare, since it leaves you no space
    for beta testing, the whole software has to be based “on the big
    picture”, and the company has to distribute whatever they got at the
    begining of the season. If more people knew this they could cut some
    slack to Them and the other companies that deal a similiar service…

  9. Invisobel says:

    @mgy: Easier to convince most of the Christian American population aka. most of America that being gay really isn’t a big deal?…. maybe not.

  10. VA_White says:

    I am a software person and I took “we do not support” in the original article to mean “our software doesn’t do that yet and we don’t know if it ever will so for now, you need to do the state return with a pencil.”

  11. BStu says:

    To be honest, there were more people assuming others were upset that “does not support” was meant as a moral judgement than people who actually did. The problem is that even if it is a software problem, there are still issues of discrimination when asking why those issues haven’t been fixed. They say they won’t charge the price of the pro-forma return, which is good, but why wasn’t that the message these customers got? Why were they urged instead to pay more for an office prepared return? Maybe these are all conventional failures of customer service, but we should recognize that something can be poor customer service AND discrimination. The question ultimately is why was the service poor in this circumstance. Lack of effort or interest in dealing with this problem does raise valid questions of discrimination. Questions that don’t get answered by just repeating “its just the software”.

  12. shor0814 says:

    @BStu:
    I think it would have been even more reasonable to actually call the HR Block support line or e-mail and ask. Sounds like the software does work, but may need some extra steps to work out. Wouldn’t that be worth asking the support people?

    From the article, it sounds like the couple got the message, and immediately called the ACLU. It doesn’t even sound like the ACLU checked either. I guess it is too difficult to ask for help from the support system in place.

  13. facework says:

    The fact that the federal gov’t does not support joing filing by domestic partners makes joint filing at the state level a more complex and repetitive process.

    I recently did my joint state taxes (with a domestic partner) at an H&R Block branch this weekend and was very happy with the service. Although it was rather time consuming. Three hours were blocked for the process, and it took about 2hrs 45min. The tax rep is someone I’ve used in past years. He did say the technical process took a long time to develop.

    As someone noted above each domestic partner does their own federal return. Then a fake “state only” federal return is created that is used to create the joint state return. The joint return cannot be filed electronically. They must print it and they provide an envelope to mail it to the state tax board.

    So, the process itself is a pain in the arse, but H&R Block does a fine job of it.

  14. Rectilinear Propagation says:

    To be honest, there were more people assuming others were upset that “does not support” was meant as a moral judgement than people who actually did.

    @BStu: Exactly. Even the couple in the original article said they knew “does not support” wasn’t H&R Blocks’ personal opinion of civil unions.

  15. disavow says:

    @BStu: I notified the VP over customer service at HRB of the original posting on 3/27, and he replied the same day that the VP over the TaxCut family has several program managers working on a more elegant, longer-term solution. It’s entirely possible more states will go Connecticut’s route in the future, so it’s in HRB’s best interests to fill that potential market niche.

  16. VA_White says:

    Again, as a software person working on a 90-day release cycle based on specs released by a government agency, sometimes you have to make tough decisions regarding development resources.

    There were TONS of tax code changes that weren’t finalized until the last minute. These affected all federal filers. I’ve walked hundreds of miles in their development shoes and when you get 80% less time for development than you expect on critical portions of the software, you bite the bullet and satisfy the majority of your customers.

    When we get down to the last minute and our government agency throws us major changes two weeks before release, we go over every open project and see what we can push off until next release. If there is *any* possible work-around (like using the office preparer at a discount) then we push the project back and get the critical things done.

    They had to make a choice – make sure the vast majority of state filers can file or spend their resources re-engineering the software to make sure a tiny percentage of customers in Connecticut can file their state return without taking it to the media and whining?

    And we can sit here and debate how they should be ready with enough development resources at the drop of a hat but we all know that’s not realistic. At least I do.

  17. Trai_Dep says:

    Since most opposition to gay marriage is justified by misguided interpretations of the Bible, and the Bible explicitly forbids marriage (and demands that the brother of a widow marry), shouldn’t Federal tax code (and TaxCut) not recognize divorce? And auto-marry the eldest single brother of a dead husband to the widow?
    I mean, if we’re going all “holy” and stuff. C’mon, Bible-quoters: walk the walk!
    Whoops, forgot – only cite the Bible when it’s an inconvenience to others.
    Silly, rational me. Never mind.

  18. Trai_Dep says:

    Darn, not enough coffee in the morning. Correct first sentence to:
    “…and the Bible explicitly forbids divorce (and demands that…

  19. consumerd says:

    Ya know not to be an apologist for h&r block, but it seems to me the Taxcut software is not designed to really handle this type of situation and it would be best to see the rep in person. It’s like trying to troubleshoot a PC problem, not everyone is going to be using Microsoft office, or Open office. Consequently not everyone uses Mozilla Firefox, nor Mozilla Thunderbird.

    They can only build applications to meet the “status quo”, it doesn’t mean it will meet everyone’s needs. It sounds like from the way I read it, and I admit I could be wrong, that the software won’t meet every situation. Which truthfully, I kind of respect that because last thing I need to do is make a mistake on my taxes and get audited for something I did. I would rather spend the money and have a second pair of eyes examine my tax forms.

    Sounds harsh, and sounds like I am “pro-corporate” but in this case I have to hand it to them, as least they recognize the problem and have ways around it.

  20. leaveit_nowdude says:

    I don’t think the response was good at all. In fact, this marketing VP spends half her time bashing TurboTax for handling the situation they don’t!

    The fact she says they ask you to go to their offices means you have to pay more and while you’re there, they’ll try to sell you mortgages, securities, etc. That’s why Block is a retail outlet not a software company. They don’t WANT you to be self-sufficient because then you don’t go in their office and drop another $500 you didn’t plan on.

    I am glad they finally responded (slow!) but anytime a company takes pot-shots at their main competitor you know they’re trying to deflect the real issue.

  21. UberGeek says:

    Just a Test link. Sorry.