The plan for a free tax filing program by the Internal Revenue Service is not a threat to commercial providers, according to H&R Block CEO Jeff Jones. Jones made the comments during his company’s recent webcast for earnings for the year ended June 30.Asked about the IRS program by an analyst, Jones replied, We do not see it as a material threat to the business.” One question is the ability to the government agency to market its program Jones commented. He also noted there are also 30 organizations and nonprofits offering free tax preparation.
Jones also predicted that the next tax season will likely be a more normal one, falling in the historical pattern of an expected 1 percent increase in the number of tax returns filed.
“We do not foresee any industry dynamics that would change this assumption.” he said. The stimulus filers whose returns increased the volume “are now behind us,” he continued. “There are no major tax law changes anticipated, and employment has remained strong this year, which is usually correlated to filers in the next year.
For the most recently ended year, net income rose slightly to $562 million from $561 million for Fiscal 2022. Fiscal 2023 revenue reached $3.47 billion, an increase of nearly 3 percent from $3.46 billion the prior year. Jones has previously acknowledged a loss of market share along lower income assisted filers. The company must improve the clarity of its message and it must have the message in the market when those filers are in the market.
“We have to do a better job communicating our value proposition earlier in the year,” he said. However, simultaneously, Block improved its appeal for higher-income clients and saw more than 10 percent-growth with those with more than $100,000 in annual income, Jones said.
