Estimated reading time: 2 minutes, 28 seconds

Bill Cobb, H&R Block H&R Block executives would not directly comment about the impact of the company's $1,000 a day to 1,000 people in the early part of the tax season. Certainly, results for the company's showing returns off by 6.1 percent for Block's fiscal year to date for the period ending February 28 was not what it had hoped. 

And Internal Revenue Service statistics show a drop in professionally prepared returns across the industry.Total returns through February 28 were 10.6 million, compared to 11.3 million in last year's corresponding period. Those numbers include assisted, desktop, online and Free File Alliance returns.

All weekly statistical reports from the IRS show filings lagging the 2015 tax season, although the gap dropped to .4 percent for returns filed through February 26, compare to a decline of 4.6 percent for the season through February 5. For the period ending February 26, professionally prepared returns declined by 3.6 percent while self-prepared ones rose by 3.8 percent.

"We are seeing the impact of delayed filings on our volumes and our revenues," Block CEO Bill Cobb said during the company's recent webcast for its financial results for the third quarter ended January 31.

While Cobb did not directly assess the success of Block's cash giveaway program, he indicated there was some impact. "We felt very good about the program. We are starting to see some positive movement on revenue per user."

The company lost $79 million from continuing operations, compared to a loss of $35 million for last year's corresponding period. Revenue for the most recently ended period $475 million, down 6.7 percent from $509 million a year earlier. Block continues to believe that the Affordable Care Act has pushed many early season taxpayers into filing in the second half of the season.

The company's divestiture of H&R Block Bank also reduced revenue, but it also means Block is no longer regulated as a savings-and-loan company and it was able to repurchase shares. Another drag on revenue growth, Cobb said, was the company's decision to stop offering free returns early in the season this year.

While taxpayers continue to move to do-it-yourself filing via software, with Intuit's TurboTax increasing its domination, Block has suggested those numbers show the impact of fraudulent filing since software-preapred returns are not subject to the same scrutiny as assisted returns.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Last modified on Tuesday, 08 March 2016
Read 5550 times
Rate this item
(0 votes)

Visit other PMG Sites:

click me
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.
Ok Decline