People at HR Block are just random people off the street that took some workshop courses and use a software program to do your taxes. If you have something complicated your better off finding a tax atty. or doing it yourself by hand.
Turbo Tax cost me dearly when it moved some income to the wrong category. The IRS initially determined I had not even declared the income. Long story short it took hiring a tax atty. to straighten it out so I only owed the unpaid tax and a small penalty.

sounds like you still got a good deal here... if you got a whopping refund in 2007, that was money you should never have gotten back. that should equal what you owe to the government, maybe plus some penalties. but on top of that, because you bought insurance, HR is paying (essentially) $3k toward what you owe. seems like their fuck up caused you to pay $3k less than what you actually owed the first time around.

it just sucks to have to pay so much money now, that you may not have anymore.

I'm glad I don't "have people"

Sorry, no sympathy here.

When you signed off on that IRS form, you are stating for the record that you understand what's on it. The fact that you relied on their insurance to cover you tells me that you suspected there was something not right from the beginning, but chose to ignore your suspicions in the hope that any discrepancy would sail on through undetected--or that the insurance would 100% pay if it was caught.

Lesson to take away here is that if you need someone to prepare your tax documents, make them explain every line they filled in--in detail if necessary--so that you can possibly catch things prior to filing that just don't 'feel right'.

Companies with competent staff don't have to use marketing BS to advertise that they have competent staff.

I had my taxes done my HRBlockhead 2 years in a row when I first started teaching, but after I opened my business I realized they had no clue how to handle my deductions properly. So I hire a CPA, and he offered to review my previous returns. He found that HRBlockhead made numerous errors, including disregarding simple things like my Education Credit and the EIC, not to mention the deductions I didn't take for buying teacher/classroom supplies. He filed amendments and I got back about $2000.

This is not a blame the consumer, but its a question, did the OP not review the tax form before signing same? When we do our taxes we fill out a 20 page survey based on last year's taxes, we gather all the forms, documentation and supporting documentation, then we sit down with our accountant for about an hour and go through the survey. Then he does our taxes, we come back and we go through our tax forms and schedules line by line and make sure there are no errors then we sign. Also, question re: HR Block, how do they report $33,000 in charitable donations without receipts? My accountant won't let me claim deductions for our goods donaitons to Good Will because the receipt doesn't assign an actual value.

How does HR Block work? Is there a similar review process with the customer that, even if you are not an expert, should have triggered a question or two. For example, John, looks like you are an extra generous person, you gave away more than half your salary to charity.

Former H & R worker here (1 year, plus 3 with Jackson Hewitt)). Bohemian hit the nail on the head. Yes, there are some workers who had years under their belt and knew what they were doing (Shout out to Dave!) but most of my co-workers were semi-senile 60-80 somethings looking for a way to suppliment their Social Security income. I spent more time helping/correcting them than actually doing taxes. The hourly pay is good, and you get a nice commission on each tax form done. The downsides? The hours were erratic (20 hours one week, 40 the next), and your total hourly wages are subtracted from your end-of-season tax commission (which JH doesn't do). I also left because my boss was a ball-crushing bitch. (If you're reading this Mary, fuck you)

I'm sorry you had to deal with all that crap. However, that's not why I'm commenting.

You gave away over half your income in a year when the economy was beginning to tank? Wow. That's pretty amazing. Kudos to you.

@The-Lone-Gunman: I agree. There is NO WAY I believe that someone would not notice that their tax return had #30,000 in charitable donations, unless they didn't look it over at all. I agree that H&R Block sucks, and are prone to stupidity like this, but seriously, he should have at least made some effort to understand why his refund was so large.

Next time maybe you will read what you are signing, especially when it is going to the governent. I'm surprised you didn't get an audit. These are the people that signed for adustable rate mortgages that reset to 10% after one year claiming they were taken advantage of. A little common sense goes a long way.

I can't help but laugh when I walk through Wal-Mart and there are people there getting their taxes done by someone in a little cubicle they setup. I can't imagine anyone getting their taxes done at Wal-Mart has finances so commplicated that they couldn't fill out one of the many free basic e-files online. Please correct me if I am wrong, I'm sure you will. Maybe I need to start putting adds on craigslist during tax season and make a few extra bucks filling out 1040 ez's online.

So isn't he still making out with a net positive on this. Lets say his actual 2007 refund was supposed to be $2,000, but he instead got $12,000. Now this year he owes the IRS the difference, $10,000. After paying taxes on H&R block's insurance, it sounds like he has to pay out of pocket about $7,000 on the $10,000. So he actually ends up making $3,000 net profit less the $30 he paid for the insurance. Of course, he may have spent all of the extra $10,000 already since last year, making it hard to come up with the 7K, but when you add everything up he's still coming out on top with H&R Block being the one ultimately losing money (which they should since they screwed up in the first place).

@MissTicklebritches: I think the point is that he didn't; he didn't make any donations. Block just said he did.

I'm not clear if he's actually out money, though; if Block covers the penalty itself, and it sounds like they're doing at least that and maybe more, he's just paying what he would have paid if they were competent. I do get that he may not have stuck the refund into a savings account in the meantime so that it's not that simple, but in actual bottom-line terms it doesn't sound too bad. It's just the human terms and the Block-is-an-idiot terms.

I wonder if one still has their tax files with income and deductions, if it could be possible to prove fraud on H&R Block account. If one did not list $33,000 in charitable deductions it would seem out and out fraud on H & R Blocks case to have listed that on someone's tax return. I'd be pressing for a complete compensation on of taxes for their screw up rather than just taking what the insurance paid out.

H&R Block hires anyone off the street, provides minimal training and if you're lucky they won't steal your identity and ruin your life. Go to a real accountant or use Turbotax.

@ SadSam : When we do our taxes we fill out a 20 page survey based on last year's taxes, we gather all the forms, documentation and supporting documentation, then we sit down with our accountant for about an hour and go through the survey.

And there's the difference: you use an accountant, the OP used HRBlockhead. Many of them are not CPAs. They are regular folks hired, briefly trained, and then sent out into the world screw up folks taxes.

@cc82: He is, but that is not the point.

My new CPA says this: H&R block tax preparers go to school for 40 hours and get the job, while a real CPA takes at least 40 hours a year in new classes to keep up with the ever changing tax code.

and an FYI... most CPA's are cheaper then H&R

@Chongo: The CPAs I called were definitely not cheaper. Worth it? Yes, But not cheap.

@The-Lone-Gunman: I really don't think anyone understands the forms, including the IRS. Therein lies the problem with the system.

@bohemian: Been using TurboTax for at least 15 years on a reasonably complex return (Schedule C, Schedule E, etc.) I comb the return by hand after I print it out and never had a problem. How did TurboTax screw up?

@ckaught78: When I met my husband, his mother was paying a local woman $80 to do the most BASIC taxes. No deductions, 2 dependents (her grandchildren that her 24/7 drunk daughter abandoned) NOTHING. They couldn't even claim the interest on their mortgage. The woman wasn't e-filing their taxes, so it took 3 times as long for them to receive their check in the mail. The woman wasn't using the computer programs, she did everything by hand as well. Which is great that she's able to, but why anymore?

I pointed this out to her, and said that I would do her taxes on Taxslayer for $10. And every year, they save $70 and get their refund within a week or so in their checking account.

My sister and her husband won't do their returns on their own- they want the "peace of mind" of hiring someone to take the fall if their return isn't done correctly. WHAT B.S.

You can remind H&R Block that their "Piece of Mind" policy is pure margin (profit) for them and they only have to pay out due to their own representatives' negligence or error. SEEMS LIKE A GOOD DEAL FOR THEM!

@bohemian: but it doesn't sound as if she was doing anything complicated. The people just screwed up big-time, and now she has to pay all of this money.

I would suggest contacting a lawyer, as they were hired to do a service, and screwed up big time. Now you are in the hole by a considerable sum of money.

@N.RobertMoses: agreed.

@The-Lone-Gunman: You cannot blame op on this one. Sure, you can say that signing off on the paperwork means that she is responsible for any errors. But 1) most people dont know what the hell any of that stuff means, and just use software to do all of it. 2) When hiring someone else to do your taxes, you are expecting them to not screw up considerably. 3) just because you are getting a considerable sum back does not mean there was a mistake. Over the past few years, I did not make enough to really get back what I should have, so this year, I am going to get quite a lot back.

@dougp26364: But he signed off on it. Whether or not H&R Block committed fraud, he would be held accountable.

We had our taxes done by someone who was recommended to us. She is a tax preparer that used to work for the IRS and H&R Block. She told us that H&R Block works with the IRS to make sure that they somehow, screw over taxpayers into getting less than they really should from the IRS. Now, she works for herself and makes SURE she goes out of her way to get people back the MOST they she is able to. I am quite happy with what I got back and so is my husband.

@Intertrode: not true, when in a sea of mediocrity, those that excel still must advertise themselves. People have a tendency to go with the bigger name, and that is normally the one that advertises the most.

@absentmindedjwc: Absolutely you cannot blame the OP on this. As a juror, I'd be hard pressed to not find in favor of the OP - he paid a firm to do his taxes, he purchased extra insurance (which sounds preposterous to need in the first place), attempting to insure that he had a legitimate tax return. He intended to do it honestly, and the company let him down.

For all of those who say that "he should have looked it over" - the H&R Block people have to affirm that they've completed the form accurately too. If your business is doing taxes and you do it poorly, you're certainly responsible.

I've used H&R Block before and they've always gone over my return line by line when they're done. "And here on this line it shows you donated $33,000 to charity." Even if they didn't go over it, he should have, and you wouldn't have to be an accountant to catch that mistake.I don't think the OP can put all of this on H&R Block.

@absentmindedjwc:
So if someone hands you a contract and you don't understand it, should you just sign it? Of course not. I imagine you could ask them to go through it line by line if you truly didn't understand the tax forms. I'm sure they wouldn't be happy about it, but I don't think they'll get paid until you're satisfied that the forms are completed properly and you sign.

Who knows? It's possible that this H&R Jock wanted to make some extra commission and intentionally entered the fraud into the return. He or she likely got an incredulous reply from the client but assuaged the OP's fears with some "economic stimulus" B.S. and offered some cheap insurance.

The fact is, the H&R person obviously knew what was going on ("$10k more in rebate that any other typical $60k earner? I MUST be good...") and obviously knew that the insurance would cover his client's ass.

The only other way out of it would be to claim that the papers of another client (who happened to have donated $33k to charity) had gotten mixed up in the OP's file. Not bloody likely because anybody with that kind of money to donate to charity likely has their own accountant.

@Drew

Yup, the OP bears no legal responsibility for the contents of his tax return. No, wait, he/she does. The form authorizing the filing of the records, in addition to the engagement letter signed with the Tax Preparer specifically make reference of the responsibilities of the tax payer.

Moreover, how in the hell do you not understand what the hell a Schedule A is? It says "Itemized Deductions" on the header. More importantly, how do you not catch the whacky amount on line 42 (or whatever) on page 2 of the 1040? If there were any doubts with regards to the return, it is on the tax payer to voice them. While it sucks to owe the IRS (especially if you are at the point where the interest and penalties are kicking in), tax preparation is a personal responsibility in the eyes of the IRS. If you trust your uncle or some rickety shack H&R block to do your taxes, they care little. Your name, your ssn, your problem.

Now, you COULD take H&R to court on this one, especially if you've been assesed penalties, but you likely signed your rights away when you hired them to do your taxes.

When I was in the Air Force, I ran an installation tax center for two tax seasons. I got a lot of prior H&R Block customers. I learned to loathe H&R Block because of things like: "What do you mean I can't claim the cost of my textbooks/computer/internet service as an educational expense? Block let me!"

Umm, no. The rule as I recall it was
that you got to claim "fees payable to the institution as a condition of attendance." All most schools care about is that you buy the book, they don't care where it's from. Even online schools don't (as far as I know) mandate the source of the computer or ISP. So they didn't fall within the rule, and thus I couldn't assist them in claiming those things under educational expenses.

I'm sure that the Block preparers did permit it. They evidently get paid an amount for each form, like a tax piecework factory. It's to their advantage to put whatever the program will allow, get the client out of there and start the process anew. There's a disincentive for accuracy.

@absentmindedjwc: Sounds like Tuyen is a he not a she?

You got away with paying half as much tax as you should have 1 year later.

What I have learned about H&R block in my travels is that they get audited more than any other company that does income taxes out there.

Bohemian you said that Turbo Tax messed up your return that is incorrect, you messed it up by putting the wrong information in the wrong line or form. Educate yourself by reading the IRS publications if you don't know what something means or use Turbo Tax's HELP function, that is what it is there for.

My wife is currently attending college to become an accountant. And after hearing this, it gives me a warm and fuzzy feeling inside. Like Southern Comfort, but without the acid reflux.

I feel no sympathy for this guy. He surely must have suspected something was wrong when he was told of his tax rebate, stock options or not.

First, when you SIGN the form and send it to the IRS doesn't it say something to the effect of :I understand I am responsible for anything on this form, even if someone else filled it out for me?

Second: How much does H&R charge to do someone's taxes?

I use an accountant and stories like this make me feel much better about the $150 I pay him.

One more thing, isn't there a simple line you can look at that says
Charitable deductions?
If you saw $30,000 in any line on your taxes except in the income areas, when you are making 60k, wouldn't you realize something was wrong?
Just sayin...

@kwsventures: No, as he never would have owed 10 grand without their "assistance"

@consumer-warrior: Or he didn't

I think it's ridiculous that the OP is paying tax on what's basically a promise by HR that they won't screw up. They should have to pay the tax on it. And then the tax on the tax. etc.

@sendbillmoney: Uh, doesn't textbooks fall under HOPE and/or Lifetime Learning Credit?

I believe that computers will also fall under the expanded version of HOPE that was part of the Stimulus Bill.

@The-Lone-Gunman: "Under penalties of perjury, I declare that I have examined this return, and to the best of my knowledge and belief, it is true, correct, and

accurately lists all amounts and sources of income I received during the tax year. Declaration of preparer (other than the taxpayer) is based

on all information of which the preparer has any knowledge."

To the best of Tuyen's knowledge, it was correct. The fact that he had no idea what the hell any of it meant was a moot point. The preparer, however, by signing the little box that immediately follows the taxpayer's signature box affirmed this as well; this is the sort of thing to bring up.

Every year I do my own taxes (1040ez since I don't have very much in my name) and go with my mom to a CPA friend of my dad's to do her taxes; I always look over the form before my mom signs and go over any questions I have with him and he seems to appreciate the gesture.

Call me jaded but the tax forms aren't really that hard; for fun I did the 1040 regular version one year by hand and came out alright (although it took the good part of an afternoon). It realy just takes some patience and a little willpower to go slogging through the books to find all of the definitions and schedules; doing this in turbotax (as my friend does) makes it infinitely faster and easier. I looked at our CPA's tax software and it's practically a glorified version of turbotax anyway.

Tax laws change all the time. I have no idea what is deductible one year to the next. As someone who receives scholarship money, I don't know what the proper way to deal with any of that is. I have no problems hiring an accountant who does this kind of thing for a living and knows whats best to do in order to maximize my return and fill out everything properly. Why is it BS to pay someone a small fee (I've spent more in cell phone taxes each year then what I spend on an accountant) to do well what they do for a living?

yeah, this is why i go to my local guy. CPA, charges $50 total to do my wife/my taxes. bingo bango.

My mom is a CPA and so I've asked her about this kinda thing before. She signs the return and I sign it too, however, all liability rests with the taxpayer, not the preparer. I know this is still H&R Block's fault, but the OP should have read it closer. I'm not sure about H&R Block, but my mom's firm produces a 1 page summary about the taxes that also highlights the differences year over year. That type of thing may have helped.

@kwsventures: He owes penalties and interest probably. Unless you are in Congress, you have to pay those too.

[www.foxnews.com]