H&R Block Leaves Guy With $3100 Bill

Travis used H&R Block’s On-Line Tax Help last year, and due to an error on H&R Block’s part…he’s been hit with a $3100 tax bill for a deduction he took but was not qualified for. Travis didn’t pay the extra $29 bucks for the “Peace of Mind

guarantee”, so Travis will be responsible for the bill. Whoops. H&R Block’s included “Accurate Calculations Guarantee” covers “penalties and interest caused by such error.”

In all, Travis will not be paying more money than he originally owed, but he is being hit by a large and unexpected tax bill when he was expecting a refund. What should Travis do? According to H&R Block there’s not a whole lot he can do, other than make sure that H&R Block steps up and covers any fees and penalties. Alas, it seems that this is a cautionary tale.

From Travis’ email:

Please….anyone out there. DO NOT USE HR BLOCK. I think they hire the people that the DMV rejects and gives a crash course in tax preparation.

Do you think there is anything I can do? If I was going to cheat on my taxes I sure as shit wouldn’t go to HR Block.

Any tax gurus out there want to give Travis some free advice? We’re afraid this sort of thing is beyond our ken. —MEGHANN MARCO

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Travis’ email inside.

    Dear Consumerist-

    I should have known better….plain and simple

    I used HR Block’s online tax help for my 2004 return. I input my information on their site and sent my receipts off to one of their “Tax Professional” to prepare my return. I was relocated for work that year and had a nice deduction because of it….or so I thought.

    The ever so competent “Tax Professional” made a huge mistake on my return and I know owe the IRS $3100.00. I was told since I didn’t pay the “Piece of Mind” insurance…that it was my responsibility.

    Please….anyone out there. DO NOT USE HR BLOCK. I think they hire the people that the DMV rejects and gives a crash course in tax preparation.

    Do you think there is anything I can do? If I was going to cheat on my taxes I sure as shit wouldn’t go to HR Block.



Edit Your Comment

  1. Brianron says:

    Throw yourself upon the mercy of the IRS.

    In the past 5-10 years, I have noticed a change in the overall demeanor of people working for the IRS. My wife and I have a very complicated tax return (we are both self-employed, she works in Canada, and we live in the U.S.) and even though we hire an accountant to do our return, there are always corrections, oversights, and errors.

    If Travis immediately (do not procrastinate) writes a letter to the IRS explaining that the deduction was originally suggested by H&R Block (assuming that is true), that he followed their advice, and sends in a check covering the deduction amount plus interest, there is a fair chance they will waive the penalties, which make up the lion’s share of the $3,100.

    Of course, there is no guarantee, but the only other option is to just pay the full amount. So, by immediately responding and paying what should have been paid in the first place and explaining that it was not your fault (believe me, the IRS knows about the level of competence of Block workers), you may well escape. Good luck.

  2. It seems that Brian’s advice listed above is fairly common these days. I listen to the Handel on the law radio program on a regular basis and everyone who calls with IRS problems he says the same things: Throw yourself upon the mercy of the IRS. Apparently they can be pretty willing to work out arrangements in these kinds of things.

  3. B says:

    I believe it’s part of the IRS’s strategy to be kinder and gentler. Plus they figure getting most of the money up front is easier than dragging out a court case and throwing the debtors in jail.

  4. RandomHookup says:

    Sounds like an interest free $3100 tax loan to me.

  5. rit says:

    About 4 years ago my wife and I had our taxes done at H&R Block.

    We were assigned to a ‘accountant’ who, I wish I was kidding here, was a quadrapalegic in a Stephen Hawking style wheelchair. To her credit, she seemed to have at least a partial clue of what was going on.

    But, silly me, I tend to prefer my tax preparer not be preparing said taxes by typing with a pencil in her mouth. She also kept gushing about how she just ‘took a few weekend classes’ to get the job.

    When she asked whether or not we wanted the “Peace of Mind Guarantee” my wife and I both chimed in a loud “YES!” in unison.

    Strangely enough, my wife actually wanted to go BACK to H&R Block the next year…

  6. mojohealy says:


    so by your prejudiced reasoning Stephen Hawking is a “physicist” whose writings are less reliable because of the way in which he records them?

  7. Mike_ says:

    Yeah, nice attitude, rit. Imagine if it was your wife in that chair, fully capable in every way other than the ability to move from her neck down. How would you feel if she had to deal with jerkwads like you every day?

    I used H&R Block’s online e-Filing service for my 2003 taxes. In 2004, I tried both hrblock.com and TurboTax and compared the numbers before I filed. Oddly (or perhaps not so oddly), the numbers didn’t line up. TurboTax said I was owed about $20 more. I called H&R Block to ask for an explanation, and they were totally clueless. I’ve been using TurboTax ever since.

  8. Magister says:

    Why in the world would you go to a place like that if you have your own computer? I can imagine if you are some dirt bag that doesn’t know any better. Places like Liberty Tax, HR BLock and the other guys just hope they opt for the rapid refund loans.

    If you REALLY need tax advice, found an actual CPA. Or just do it yourself. Heck, you can deduct the software.

  9. XopherMV says:

    From a show I saw on the Discovery Channel, H&R Block isn’t hiring DMV rejects. Instead, they’re hiring offshore workers in India to fill out tax returns. The show attempted to highlight the security and efficiency of this business model along with what great workers these people are. However, that doesn’t matter to me, I’d much rather pay an American to do this job than go through H&R Block. Keeping the money and jobs right here in America is more important to me than saving a few dollars.

  10. Coralin says:

    RIT makes a good and accurate point… even if he did feel the need to bury it in baseless prejudice. Ya see, Travis is right: H&R Block DOES hire DMV Rejects. In order to work for them, all you have to do is take their weekend-or-two tax prep course, and boom- you can get a job with them. One of the reasons that I’ve always been a fan of Turbotax… most returns (Brianron’s being a probable exception…) can be competed really easily; and they guarantee everything, regardless of your buying the accountant review, etc., so you can avoid most of these hassles… yeah. (Full disclosure: I worked at Intuit doing turbotax support for a seasonal shift.)

  11. Hoss says:

    “rit” is an arse. Rest In Turd I wish I was kidding

  12. Anonymously says:

    I’m confused by this story. Did Travis pay any money to H&R Block at all?

    Normally you’d be charged interest and penalties by the IRS, but according to http://www.hrblock.com/taxes/doing_my_taxes/products/popup
    H&R Block should pay those for you, leaving you only with the $3,100 owed. Yeah, H&R might have misled you, but it’s money you technically owe the government, and their service never claimed to give you free money.

  13. Chairman-Meow says:

    I once actually tried to do the paper 1040 forms as a mental excercise. By the time I got a third of the way down, my head hurt and I was completely confused. I can build global computer networks but i’ll be damed if I can figure out any tax form longer than a 1040EZ.

    H&R employees are trained to fill-out blocks on a computer. Plus they charge you for this honor. They do not have any training in the tax code or accountancy. They are regular shmoes off the street with minimal training doing *your* taxes. Unless you pay extra, if they screw-up, its up to you to suffer the consequences & penalties.

    Guess what ? You can do your taxes better by Buying Turbotax and doing it yourself. The program asks you all sorts of intuitive questions which makes it really easy to do your taxes. My taxes incude W-2s, 1099s, 1098, plus deductions for house, etc (in other words, the dreaded 1040 Long Form…*shudder*).

    I can do the entire thing in about an hour on TurboTax plus file it electronically or print it out and mail it myself. Makes the April 15th deadline funtastic!

  14. Mary Marsala with Fries says:

    I went to an H & R Block master accountant once because a friend of mine recommended her, and she was *fantastic*. Mind you, she was also almost $300, but I was getting divorced that year and things were a mess, and she did a great job. So the next year, not having $300, I decided to go to H & R straight out. BIG MISTAKE. I paid almost $200 anyway, walked out thinking I should expect a $700 refund, and then got hit with a $150 bill from the state instead. When I complained to The Block, they agreed to refund the money I’d paid them, which sounded fair…until they sent me a check for $25. It was, they said, the portion of my 180-something that covered them doing my *state* return, so it was all they would refund. And mind you, that was after *months* yelling at managers on the phone. Dorks.

  15. Mary Marsala with Fries says:

    Oh yeah, and I forgot to mention — the master accountant was in a nice office building, but the second time I went, the office was dirty, the employees were horrendously rude, and I had to wait 45 minutes past my appointment time before I could see anyway. *ick*

  16. ReccaSquirrel says:

    I once filed my own taxes and didn’t like the results. I owed far more than I thought I should. I went to H&R Block thinking that they would file the taxes correctly and I would get a small refund after their fee. Instead, I found out I owed the same amount I had calculated and now I owed H&R Block $120 dollars.

    My biggest mistake was letting them have my original W2’s. They wouldn’t file until I paid and they held my W2’s hostage. I was forced to pay their fee to be told I did my taxes correct. The following year I filed on my own but still owed. A friend of mine who had also used H&R Block ended up getting a large refund. As we both made around the same amount that year I asked him how he managed getting the refund. The previous year when he had gone to a different H&R Block, he had been advised that to always get a refund, he should go to 0 exceptions and an extra $5 per paycheck towards taxes.

    I’m pretty forgiving of companies. But holding my w2’s hostage and not dispensing priceless advice was enough for me to never do business with them again.

  17. Brianron says:


    Let me get this straight. For the warm, fuzzy feeling of getting a “refund,” you think the advice to pay the government an extra $5.00 per paycheck is “priceless?”

    Let’s work this out here. $5.00 X 24 checks equals giving the gov’t an extra $120 during the year, meaning you either have less to save/invest to earn interest or less to spend, merely because when you get a refund sometime in June of the following year, it “feels” like you are getting a bonus. From a financial standpoint, Yikes!

  18. ReccaSquirrel says:


    It actually was more about the exceptions than the + $5.00. I had gotten the impression somehow that more exceptions were good and as a result I had 2 exceptions on my federal taxes. I won’t bother boring everyone with the details of my financial situation but I’d rather have a refund to help pay off credits cards than a new bill I need to make monthly payments on at the beginning of the year.

    If H&R had pointed that my exceptions was hurting me, I would have at least forgiven them for holding my w2’s hostage.

  19. aka Cat says:

    Travis doesn’t need to beg the IRS to waive the interest and penalties. Nor should he. It’s H&R Block’s responsibility to pick that up.

    Was rit really taking a dig at a disabled person? I assumed that he was talking about someone typing with her hands while holding a pencil in her mouth. That is a fairly unprofessional image.

  20. Happy Scrappy Hero Pup says:

    My wife and I had just relocated to Atlanta and really hadn’t had time to hire an accountant, so we sucked it up and went to the Block. We really don’t have anything overly complicated. I’m doing a professional MBA program, but aside from that, pretty simple deductions and what not (after using an NYC accountant that found every opportunity to do some things that made me a tad uncomfortable).

    Anyways, to make a long story short. AUDIT!!! Bonus. The block idiot tried to claim my tuition as a business expense (she explained that it was completely legit, and I actually almost came to blows with the auditor abou this, but that’s another story). So, we got audited which is just as bad as you’d imagine and ended up owing $5K. Thank God my wife had the foresight to buy their protection program. To their credit, they paid it all without problem, but i do have to claim that as taxable income this year.

    Moral of the story. Never, never, never use HR block, and if you don’t listen to that, pay the $30 bucks.

  21. Turbo Tax, people! Turbo Tax!

    (Also I’m firm in my belief that everyone over the age of 18 should at least be CAPABLE of doing their own taxes even if you opt not to do them by hand.)

  22. deliriousnyc says:

    The people who work at H&R Block are all housewives and retirees who only really work from January through April 15. On top of that, they get paid crap wages and will do only the minimum that they have to to file your return. You can bet they’re not looking out for you when it comes to getting all the deductions that you’re entitled to.

  23. Anonymously says:

    H&R employees are trained to fill-out blocks on a computer. Plus they charge you for this honor. They do not have any training in the tax code or accountancy.

    That’s absolutely incorrect. I went through the H&R Block personal income course last year. It consisted of 66 hours of training on how to fill out taxes by hand, we never even touched a computer. Only after you passed the course with a satisfactory grade would they even grant you a job interview.

    My biggest mistake was letting them have my original W2’s. They wouldn’t file until I paid and they held my W2’s hostage. I was forced to pay their fee to be told I did my taxes correct.

    That’s completely contradictory to what I’ve been told about their policies. Supposedly, you can have your taxes done, see your refund amount, and walk out without paying anything. It sounds like you dealt with a shady individual, or corporate pressures their associates to weasel around the policy as much as possible.

  24. jpleonard says:

    We, my wife and I, were told we owed right under $600. Of course, she blamed me and said I did not have enough tax taken out of my check (that is what the terds @ H&R told her).

    A few weeks went by and we decided to double check because it was eating at us. We found the error and brought it to them. They redid our taxes and come to find out, they were wrong. Yippie.
    When we got home, we double checked everything again and found out that their re-do was WRONG! We eneded up getting $800 back.

    Never again will I use these people. I think they should leave their employess helmets on so you know who you are dealing with.

  25. puzzle says:

    Excuse me but are ya’ll talking about franchises or company owned H&R Block tax offices? There’s quite a bit of difference in the two. For one, franchises have to educate their preparers themselves, company owned H&R Blocks have an extensive training program. Also the preparers must meet due diligence and have to take classes on compliance and sign documents validating that they took them. Yes there are times when the wrong preparer is matched to the wrong tax return, but more times than not they get a preparer that does a good job. Most of ya’ll are so hep on the Turbo Tax and other online versions of taxes, did any of you research and find out where they obtained their prototype? Look it up.

  26. Aeroracere says:

    TaxAct. Used them the past three years. No problems.

  27. jim_c says:

    Disclosure: I have worked for H R Block for two years. Before that I did my own taxes using tax software or pencil and calculator. I have a degree in accounting and took tax courses at the undergraduate and graduate level so the Block tax course was relatively easy. But the tax law changes frequently so I still learned a lot about Earned Income Credit (EIC) and other areas. And I have to take at least 24 class hours of additional/refresher training each year just to be rehired. Block (corporate owned office) is serious about training.
    The vast majority of my coworkers are competent and conscientious but like any cross section of society they are some that don’t belong. So far they have all been invited to look elsewhere for the rest of the season/next season. Before you start to think other tax preparation alternatives are better please take note. With about 30% of the basic course (prerequisite for Block job interview) completed a classmate announced she had already learned a lot more than she had the previous year when she was working as a tax “professional” for another national tax firm. I once did a return for a client with rental property. The prior year was done by a CPA that failed to claim depreciation (very basic). Many CPA firms employ “back room” workers who do most of the tax preparation with available tax software (almost data entry) so mistakes are inevitable.
    Bottom line: parts of the tax code are confusing and subject to inerpretation (hey – the IRS won’t even stand behind their own tax advice). Pick an office/preparer/method that you are comfortable will do the job for you. If you choose to do it yourself be prepared to spend additional time (maybe lots) making sure you get every deduction you are entitled to. And if you are not comfortable with the results, get a second opinion, I do.
    BTW Block policy is that if you are not satisfied, you do not have to accept the return and pay. In other words, you can walk with what you can in with. I have given tons of free advice and had a few clients walk because they didn’t like the numbers or they were the same as they had come up with. I have also had a number of clients ask specifically for me because of the work I did before.

  28. swf2e says:

    I can say from experience, because I am one of those people behind the desk, that H&R Block does not hire dummies, at least in my district. To Become a full tax professional, a person is required to have 66 hours of classroom training and 21 hours of on-the-job training as to the running of the office. The 66 hours of classroom training includes 60 hours of class, and a 3 hour test. The book that is required to be read are about 3 inches thick.

    We do have some people that take half of the classes, but they are only tax professional assistant, and are not allowed to complete returns themselves.

    And about the Peace-of-Mind, see if anyone else, such as Accountants, Jackson-Hewitt, Liberty, etc., offer any sort of guarantee on there work, at least Block does offer something. And another thing, I wouldn’t use Jackson-Hewitt if my life depended on it because they are being investigated for tax fraud.

    By the way, in case someone doesn’t know, the tax code is huge. The original code was almost 1000(one thousand) pages when the income tax was established in the early 1900’s. Today, it is over 60,000(sixty thousand) pages. Anyone that wants to read that can go ahead.

  29. swf2e says:

    I am also an associate in a corporate-owned district. We have had numerous people come to one of our offices complaining about the franchises in the area. In my ITC Training, we had a person with an accounting degree, and she thought everything was easy. Come to find out, her federal taxes classes had them preparing a 1040(regular) from memory, without the form. It was challenging for the other 10 or 12 in the class.

  30. BenSchmidt says:

    Dont feel bad, My wife and I did our taxes with H&R block in 2005, this year in January, we recieved a letter from the IRS stating that we still owed 1200.00 for 2005. My wife called the IRS and they stated that we did not include one of our W2 forms, My wife found the w2 in the H&R block folder so they forgot to add it in. We paid for the piece of mind so we thought we were good and they would take care of us. WELL, we tok our messed up taxes in, they charged us $91.00 to refile the messed up taxes. We were told that it would take six to eight weeks to get this taken care of. This was the first week of March. We spent the next six months getting a runaround between the district office and corporate. about twelve weeks into this, I had my lawyer contact H&R block to get them to quit stalling, The district manager informed me that they all we were waiting on was to verify our address ( nobody called to ask and incidentally, it was the same address that was on the return..Lie #1). So this dragged on until the first week of July, we were promised a check three times during that time but something always came up. Finally, we recieved a letter Denying our claim stating that the stuff in the folder was not stapled so we must have put the W2 in after the taxes were done. A day after recieving the letter of denial, I recieved a call from a lady with H&R blocks client relations department asking us if we were satisfied with the Decision on the piece of mind claim, I told her that after being strung along for five months, lied to and then blamed for thier mistake, not to mention sticking me with taxes that will have to be repaid next year, I was very disssatisfied and would never use H&R Block again, I also told her that this was not over. She said since ” We were good customers for H&R Block” that they would cut us a check for the taxes owed, plus another check for the fees and penalties, and a coupon for free taxes for next year” ( lie #2) She asked if this was agreeable she wanted to get this case closed up. Well, a few days later, I recieved a check for twenty Seven Dollars for the penalies and fees but no check for taxes owed or the coupon that was promised. I called and talked to a gentlemen who was not sure what was giong on so he reopened the case. It wasnt even an hour later and the same lady called back and asked why this was reopened, I told her that we got the check for the penaties but not the other one. I asked her if even with the letter denying the claim, were they really going to take care of this, She said they were giong to pay me upfront and refile the claim through teh district office and not to worry, give it a few days ( Lie #3) about a week later, no check, no coupon. I called client relations who had no idea what I was talking about and that the case had passed the ten day grace period to challenge the deial so we would have to start all over. So this lady stalled us through the grace peiod with no intention of taking care of us. The piece of mind is garbage! they have no intention of paying for mistakes. its just a way for H&R Block to but a few extra million in thier pocket for diong nothing. I am currently taking them to court for the money. this has been a lot of lost work, and aggravation BEWARE