H & R Block and Unlicensed Tax Preparation

by Dual Income No Kids on July 6, 2009 · 1 comment

Hi All,

This posting came across my radar screen a couple of days ago. Its a posting by a tax blogger whose postings I read with some frequency. In it, he discusses the problems a couple of his clients had with a major tax preparation company – I think its H&R Block.

The posting is relevant I think because it illustrates a couple of things:

1) The importance of getting competent tax help. The more one gets involved in personal finance, the more complicated one’s tax situation becomes. Its important to have either the right kind of education or help so you can make the right decisions regarding your money and its tax implications. The last thing you want is to have tax filing problems infringe on your ability to build wealth. Imagine what a large fine from the IRS would mean for your investments, nest egg, etc.

2) It also indicates that not all tax preparers are alike. In this case, H&R Block *probably* screwed up this couples taxes. This would be in following with this companies very poor track record.

With permission, I am reposting the TaxGuy’s post.


Bruce writes…

Friday I was interviewed and retained by a new client. This particular client has several issues that actually can fall in line with a great debate we have all been following.

First, a little background:

A young newly wedded (three years) couple has their tax return done by “pros” as they are not among those who follow the taxing world. We will call them Pat and Jody Taxpayer. Having just started their own Business they left HeRBert (the group who prepared their returns) for what to them was perceived as a tax professional. They retained a CPA to handle some general bookkeeping and complete tax returns.

Good choice?

Of course it is, “All but the militantly nefarious and hopelessly deluded concede that CPAs are experts at keeping books and records. There simply is no higher accounting designation.” then CPA.

The CPA (Certified Public Accountant) maintained records by gaining access to Pat & Jody’s bank account using the online statements. The first tax season for this CPA came around and she completed the 2007 tax return. Another year passed, and she completed the 2008 return.

Several months ago, the IRS notified the Taxpayers that the 2007 return was under investigation. Seven lines on two different Schedule Cs were in Question.

Considering a CPA had prepared this return there should be no worries.

So how did I get this return?

When the time came for the audit with the “Tax Compliance Officer”, the CPA, had manufactured information to provide the IRS to validate two of the seven lines in question and did not show up to guide the Taxpayers through the 3 ½ hour long ordeal. Needless to say, the IRS found no substantial proof or validation for seven lines in question. P & J now are holding a bill from the IRS for over $10,000.00.

Rest of the posting here.

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{ 1 comment… read it below or add one }

1 Jill July 17, 2010 at 1:27 pm

sounds like they left H&R for a CPA who did the returns that caused the problems and that they should have stayed with H&R

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