An Insider's Epinion on H&R Block
May 3, 2000 (Updated Jan 27, 2001)
Review by amykhar
Rated a Very Helpful Review
User Rating: OK
Helpfulness of Preparer:
Pros:fast service, they will back you up in an audit
Cons:You could do it yourself with a home computer
The Bottom Line: H&R Block really doesn't provide much better service than you can get from Turbo Tax. Skip the rapid refund and look at online alternatives for your taxes.
Financial information should not come from just anyone. Although anyone who can read a book or watch a movie can express an opinion, I feel that a review of a financial service requires a little more knowledge and expertise. Therefore, before you consider my opinion of H&R Block, you should know why I am qualified to write this review.
Recommend this product?
My experience with tax preparation goes back to my first job when I was 14 years old. My father got me the 1040 EZ, and checked my math when I was finished; however, other than that bit of help, I was on my own. Many years later, I lived is Egypt for a period of three years, and my return to the United States caused a few small tax complications. Working with the instruction books, I carefully maneuvered my way through the required forms, and then trotted off to H&R Block to have them electronically filed. H&R Block was unable to file my return electronically because I had not filed in a previous year. However, they checked my work, and were impressed with the job I had done on my return. They invited me to attend tax school and become a Block employee. A few years later, I did just that. I worked at H&R Block for one tax season. In addition, I took an advanced income tax course at my local college, and have been preparing tax returns in my home for a select few clients ever since.
The tax preparation "experts" at H&R Block are typically no more experienced with tax preparation than I. Many of them have even less experience. Given what H&R Block pays, that is understandable. H&R Block employees work for a very low base pay, and then are awarded a bonus at the end of the tax season. This bonus is calculated by taking a percentage of the employee's earnings, and then subtracting out the base rate. During my season at Block, I made approximately $10 an hour. Experienced accountants can earn in excess of $120 an hour; therefore, you can see that quality is sure to suffer.
It is in the preparer's best interest to process returns quickly. I prided myself on my ability to complete 12 or more tax returns in a day. Typically, I spent only 15 minutes with a client, and then moved on to the next. In addition, the receptionist is responsible for making sure that returns are evenly distributed among the preparers. This means that you may not get the best preparers, just one that hasn't had a return for the day. The office was often standing room only because we were a high volume office. Therefore, on busy days, customer service could be lacking.
Despite the fact that they basically work on commission, the employees in my office were actually quite honest in the recommendations made to clients. If a simplified version of a form would work, it was used instead of the more expensive version. Any hustling that occurs at H&R Block comes from the corporate level, and not from the preparers.
H&R Block is not designed to be a high level tax preparation office. Although they do have some specialty offices that cater to a more complicated (read expensive) return, most of their money comes from the easier returns. One of the top Block sellers is a service called Rapid Refund. This service allows the customer to file their taxes electronically, and then receive a loan in the amount of their refund (minus Block and bank fees) the very next day. Therefore, most of their money comes from low income clients who are desperate to get their Earned Income Credit check. As an employee, I could not believe that people were willing to pay the fees required, simply because it was deducted from their refund, and they didn't have to pay up front.
Often, my fellow employees and I would try to convince clients that we liked, or felt sorry for, to skip the Rapid Refund, and wait for the check. Our logic fell on deaf ears. We showed clients that they could have their refund in 10 days for less than half the cost; however, we were usually ignored. At the time I was working for H&R Block, I was in a financially desperate situation myself; so my heart went out to the poor Rapid Refund victims.
H&R Block does have its uses. If you own a small business, have rental property, or had a strange tax situation arise, they can be of assistance. However, if you can use a home computer, Turbo Tax will ask you just about the same questions that a Block preparer will, and will cost a bit less money. If you are totally tax phobic, and have a simple return, Block's fees can actually be less than buying Turbo tax. What you are paying for is basically someone who knows how to use tax preparation software ľ a glorified data entry person in many cases.
That last characterization was not entirely accurate. A few Block employees are quite knowledgeable about taxes, and can give some valuable assistance. In addition, Block will back you up on any return they prepare, and attend the audit with you. In the past, each return was also checked for errors by a separate department before it was given to the customer. However, in my time there, the checking department only inspected returns that had unique situations, or spot checked returns for new preparers. They relied on the software to check the rest.
When I worked for Block, I had no qualifications behind me except for a basic tax preparation course and two days of computer training. I was not the exception. If you have a simple return and no computer skills, they will do. However, if you have more complicated tax needs, I suggest you look to an accountant in your area. Many people have found success by paying the higher accountant fees the first year, and then just prepare the return themselves in subsequent years, using the accountant's work as a model.
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