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Tax Season: TurboTax Rose, Block Sank

Sasan Goodarzi, IntuitTurboTax was the bigger winner in the recently completely tax season while H&R Block's experience reflected the woes of tax stores. Total TurboTax units sold as of April 23 were 33,908,000, up 12 percent from 30,299,000, compared to the season through April 25, 2015. In contrast, the number of assisted returns prepared at Block locations fell by 5.8 percent to 12.2 million for the season through April 19, Block said this week.

The action remained with TurboTax Online with 27,564,000 units sold through April 23, an increase of 15 percent from 23,894,000 a year earlier. Desktop units fell by 1 percent to 5,340,000 from 5,374,000. The totals were also dented by a 3-decline in Free File Aalliance units.

TurboTax's publisher, Intuit, was pleased with the results, with revenue from the consumer tax arena exceeding its original guidance of a 5-percent-to-7-percent increase in revenue for the year ending July 31. The company has pushed the range to an 8-percent-to-9-percent increase in TurboTax revenue for fiscal 2016.

"Our breakthrough go-to-market campaign helped drive the do-it-yourself software category, which grew faster than all other tax preparation methods," Sasan Goodarzi, EVP of Intuit's Consumer Tax Group, said in a prepared message.

Results at his company left Block CEO Bill Cobb apologizing for results. "The volume losses are not acceptable and as CEO, I take complete responsibility for delivering stronger results," he said in a prepared statement.

Block plans to restructure because of the results and that includes laying off 250, leaving it with 1,735-full-time workers.

Total returns prepared through Block dropped to 19,593,000 for the year through April 19, a decline of 4.6 percent from 20,529,000 in last year's corresponding period. H&R Block assisted returns fell to 12,195,000, down 5.8 percent from 12,950,000 with returns prepared at company-owned stores down 6.2 percent and those and franchised stores off by 5.1 percent. Returns prepared utilizing Block software were down 6,724,00 a drop of 2.6 percent from 6,906,000.

Block has some significant executive changes looming. The company will move CFO Greg Macfarlane in the role of SVP OF U.S. retail products and operations, effective May 1, 2016. Karen Orosco, VP of U.S. retail operations support, will become SVP, U.S. retail sales and service. Tony G. Bowen, VP of finance for the Company's U.S. tax services business since May 2013, will take over as CFO.

Delos L. "Kip" Knight, president of U.S. retail operations, will become SVP of U.S. Franchise, Canada, and Australia. Jeffrey T. Brown, chief accounting and risk officer, is retiring effective July 1 and will be succeeded as principal accounting officer by Kellie J. Logerwell, now VP of corporate and field accounting.

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
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