TAX SEASON NIGHTMARE: COUPLE PAYS WHEN
H&R BLOCK MAKES MISTAKE
By Stephanie Zimmermann, March 4, 2016 Originally Published by abcnews.com
Steven and Adriana Rahal of Florida wanted a stress-free tax season, so they signed up for their tax preparer’s money-back guarantee. But when the IRS found a mistake, Steven and Adriana had a hard time invoking that guarantee. After months of wrangling, they still hadn’t gotten their refund.
Read their original letter to the ABC News Fixer below, and see how The Fixer helped get this resolved. Also, check out the Fixer’s tips for hiring a tax preparer.
Dear ABC News Fixer:
We have used H&R Block to do our taxes for about 10 years. They offer a guarantee, and we also bought their extra “Peace of Mind” plan because we were told it would protect us financially if we were to ever get audited.
Well, lo and behold, we ended up getting audited.
We submitted two claims under their guarantees. It has been an absolute nightmare. We have gotten the runaround for several months. We have given them every document they have asked for. I have even called their corporate office and spoke with two people who wouldn’t give their last names. One man in the local office assisted us for a while but he couldn’t resolve it.
Please, we need your help. About $10,000 is owed to us -- that is a lot of money.
- Steven and Adriana Rahal, Boca Raton, Fla.
Dear Steven and Adriana:
You’re not kidding, that’s a lot of money! We examined what you signed up for and it appeared you were entitled to protection under the H&R Block standard guarantee -- which says that if they make an error, they’ll refund any penalties and interest -- as well as protection under the Peace of Mind plan, which costs an extra $40 but promises to pay off some of the extra taxes you might owe due to an error. Your Peace of Mind plan was capped at a maximum of $5,500 per tax year when you bought it; now the cap is $6,000.
You told the ABC News Fixer that after the audit, the IRS determined that your returns were miscalculated for the 2012 and 2013 tax years and that you owed more than $17,000 in back taxes, penalties and interest. That was a tough piece of news, but you figured you’d get a big chunk of that back under the standard guarantee and Peace of Mind plan.
After you applied for the refund from H&R Block, however, things hit a roadblock. You said one guy at the local office tried to help, but even he couldn’t get the refund wheels to turn. We had a little better luck. We got in touch with H&R Block’s PR team to ask about the delay and they promised to look into it.
It took a few weeks and a lot of calls and emails back and forth, but the company finally did sort this out and make those refunds. Altogether, you received a total of $9,805.35, which included $8,479 in Peace of Mind money toward the extra taxes that you had to pay, as well as refunds for the penalties, interest and tax prep fees.
H&R Block spokesman Gene King told us they “deeply regret the inconvenience this delay has caused,” calling it “a complicated situation... H&R Block continually strives to serve our clients well and evaluate ways to improve our processes. Again, we regret the inconvenience of this particular situation.”
You were smart to invoke that guarantee. As for everyone else, be sure to ask your tax preparer what sort of guarantee they offer and then read the terms carefully. There may be exceptions for certain types of tax returns or if the consumer doesn’t act quickly.
Mistakes can happen. A limited test by the Government Accountability Office in 2014 found that only two of 19 tax preparers they tested calculated the tax return correctly. Other “mystery shopper” tests by consumer groups have found error rates of 25 percent or higher.
Most states don’t require tax preparers to take a test for special competency or training, so be sure to check reviews and ask the person for their qualifications.
One final tip: Find out ahead of time what they will charge because tax prep fees can vary widely.
- The ABC News Fixer