"We had a significant amount of returns pending on January 31," he noted. The delayed start pushed the tax services quarterly loss to $214.7 million, up from $17.7 million a year ago. Revenue was just under $200 million, off 62 percent from the prior year's $472 million.

The company said results also felt the impact of its decision to end its free preparation of 1040EZ returns in most of the country. Cobb said that ending the problem would decrease the number of clients and returns, but the revenue made on the remainder would go up. Block also told some customers with more complex returns they had to use paid products and that some of those went to competitors.

"This is volume for which we had little or negative profit in prior years," Cobb said. He noted that cutting back these programs would create more capacity for dealing with profitable returns at stores. While return share will fall in assisted and digital returns for the system, the result will be improved profits.