H&R Block Goofs On My Tax Return, Won't Honor Guarantee To Reimburse Me After IRS Audit

Bambi has been getting her taxes done by H&R Block for decades with no problem. But when a recent audit turned up a small error that required Bambi pay $725 in additional taxes, folks at the tax-preparation service seemed to go out of its way, including telling her complete falsehoods about why her claim was being denied, to not make good on its guarantee to reimburse her for the $725.

In the H&R Block Client Service Agreement, it reads:

When we prepare your return, we stand behind our services with the H&R Block guarantee. We will pay penalties and interest on federal, state and local returns which are assessed due to an H&R Block error. In addition, if the IRS audits you, we will assist you in the audit process.

So about a year ago, when the IRS came knocking on Bambi’s door to tell her it would be taking a look at her two previous years’ tax returns, she contacted H&R Block to let them know and they worked together to prep for the audit, which ultimately resulted in the IRS determining that two small deductions should not have been made and that she owed an additional $725.

“Those deductions had been sanctified, indeed suggested, by H&R Block some years back,” says Bambi. “H&R Block instructed us to pay the additional taxes assessed to the IRS. Our Block representative would “submit the paperwork” for our reimbursement.”

This was around 10 months ago. You can probably guess by the fact that this is on Consumerist that Bambi’s issue didn’t get resolved very quickly.

She spent November 2010 and into January 2011 just trying to get someone on the phone who could give her an update.

Then on Jan. 18, she finally received a check from H&R Block… for $47. Along with this check was a letter detailing the three reasons her claim had been denied:

Substantiation
The Peace of Mind Plan does not apply to addtional taxes assessed as a result of insufficient records that would support the deductions, credits, or other items on your tax return. Because you were unable to substantiate the information you provided to the tax professional, your claim is denied

Failed to allow HRB to assist
The Peace of Mind Plan requires that you notify H&R Block of any audit and allow H&R Block to attend the audit as your representative. It also requires you to allow H&R Block to challenge the assessment. Because you did not allow us to assist you with the audit and/or allow us to challenge the assessment, your claim is denied.

HRB not notified within 60 days
The Peace of Mind Plan requires you to contact H&R Block within 60 days (formerly 30 days) of the date of the notice from the taxing authority. Because you failed to contact us within the required time frame, your claim is denied.

Bambi wasn’t exactly convinced by these reasons for denial, especially the last two, as she had names and dates of correspondence with H&R Block employees regarding the audit to show that she not only notified the company immediately after being told of the audit, but that she worked closely with — and followed the advice of — a Block representative when it came time for the actual audit.

Thus, on Feb. 1, she replied to each of their points, but didn’t even get a form letter response. So on April 21, she re-sent that letter by registered mail. Still no response.

A complaint to the Better Business Bureau in June resulted in a few signs of life, though all anyone at H&R Block could do was repeat the same three reasons for denying her claim.

So at the advice of a friend, Bambi wrote to Consumerist.

I read through all the supporting materials she’s already posted on her personal website and sent off a quick e-mail to an H&R Block rep in the hope that I could at least get the attention of someone willing to listen to her responses to Block’s reasons for denial.

Surprisingly, within a matter of a few hours, a rep for Block wrote me to give me the good news that not only was he able to get his Peace of Mind team to review Bambi’s responses but that she would be hearing soon from a local district manager with the good news her claim for the $725 had been approved.

Of course, we’re not counting this as a success story until Bambi has that check in hand. And while we truly appreciate Block’s swift response to our query, it should never require the intervention of a blog, newspaper, or TV news show for a customer — especially one with a 30-year history with the company — to get someone to listen to them.