Two recent lawsuits have shed light on tax-preparation franchises, raising red flags from unwitting taxpayers looking for fast, affordable service just in time for tax season.
The fight between H&R Block and Intuit, parent company of TurboTax software, has spilled into federal court and turned nasty. At the same time, federal officials seeking stricter standards for tax preparers at these types of firms were denied by a federal judge.
It all translates into a big disaster for consumers who have depended on the two services for decades — and a reminder that finding individual attention from local, accredited financial planners and tax preparers may just be the safest way to go in the long run.
To be fair, however, both of the parties involved in the latest court spat have assured the public that their employees are certified tax preparers with experience. Still, that didn’t stop Intuit from alleging H&R Block employees also worked as retail sales clerks and plumbers in hilarious commercials, drawing this tart retort from H&R Block CEO Bill Cobb.
However, it should be noted that in 2006, congressional investigators posing as everyday taxpayers entered 19 different tax chains to file their returns. They found errors in every return, and those errors typically came out in favor of the taxpayer at the expense of the government. The returns brought refunded more money to the taxpayer than they were entitled, according to this Wall Street Journal article.
Here’s how I feel: A taxpayer should perform their due diligence before entrusting their tax return to a preparer. The federal tax return, once it is signed, can expose the taxpayer to perjury (if its contents are knowingly inaccurate). The responsibility lies with the client, not the tax preparer.
And did I mention oversight? CPAs must face monitoring and compliance checks, as well as attend continuing-education events. We don’t just report back to our store manager or franchise owner. It should bring the consumer comfort to keep this in mind not just during tax season but months before the filing frenzy starts.