H&R Block Snafu Delays Refunds
…mandatory field on tax form left blank
Marketwatch.com — H&R Block, the nation’s largest tax preparer, confirmed that its software failed to fill out a mandatory field on Form 8863, which is used to claim educational credits. The IRS would not say what percentage of the roughly 600,000 faulty returns came from H&R Block (US: HRB), but the company received thousands of complaints on its Facebook page and on Twitter.
I have to tell you, I would be pretty mad if this had happened to us. My wife and I used TurboTax to prepare and file our tax return; we have for the last 5 years or so, and have never had a problem. I used H&R Block when I was younger and all I remember was an expensive “loan” in order to get my return immediately. I thought the days of those short term refund loans were over but they are not. Now there is what is called a RAC / RAL or Refund Anticipation Check / Loan.
RALs are those short-term loans usually at outrageous interest rates, for the amount of an expected refund. Tax prep fees are usually deducted from your return amount also. A “good” RAL might have an APR of 40%; a bad one can end up costing 10 times that much.
When combined with other the cost of the RAL can approach loan-shark levels.
Thankfully, this might the last year people need to be warned about RALs. That’s because the RAL industry is getting squeezed by federal regulators, who are cutting off bank funding to the biggest RAL lenders, and by the Internal Revenue Service, who is making it easier to get refunds quickly and without crazy fees.
You know, what’s really problematic is the fact that you have to pay H&R Block something like $150 for 30-40 min of time with their “tax consultant”. If I’m paying for an “expert” to prepare my taxes, I would expect there to be no errors. I realize the “tax consultant” is a human, prone to making mistakes, but this goes farther than the individual tax preparers, the fault falls on H&R Block for failing to stay up-to-date with the IRS and failing to properly train their “tax consultants”.
H&R Block explained that a form had changed, Form 8863 relating to student tax credits, and that in previous years, five lines on the form could be left blank for a “no” answer. Starting this year, preparers must enter an “N” in those fields or risk a delay.
H&R Block said it learned about the tax form change after it had submitted hundreds of thousands of tax returns. The IRS said it was aware of the problem and it is continuing to review the situation and work with “affected software companies to assist in the processing of those tax returns.”
You know, I was always instructed when filling out any form, to never leave a “blank”. If it’s a “no” answer, mark it “no”. If something doesn’t apply, use “n/a”. You would think that H&R Block’s highly trained tax preparers would follow this thinking just from common sense, especially if you are dealing with the Government.
I feel sorry for Mr. & Mrs. John Q. Public who filed their tax return and is expecting their refund only to find out it’s going to take at least 21 days for the IRS to figure everything out and issue the refund.
Now, my good friend TurboTax is not exempt from errors either. Last week, the Minnesota Department of Revenue warned taxpayers against using TurboTax to file their state income taxes, finding 10,000 returns had problems. In a terse statement, the Minnesota Department of Revenue said it would stop processing tax returns filed through Intuit (the company that operates TurboTax) if the problem is not fixed.
Well, I don’t live in Minnesota so it doesn’t affect me but if I did, I wouldn’t be as upset with TurboTax since I know full well that I am filing my return on my own with the help of a computer program. There’s not a $300 an hour “Tax Consultant” using their knowledge and expertise to make sure my return is done correctly.
If you want to insure your taxes get prepared correctly, seek out an Accountant or Bookkeeper certified to prepare tax returns.
… Often times you get what you pay for.
FINRA and FINRA Foundation Protect Seniors from Investment Fraud, Help Military Save for Future
The FINRA Investor Education Foundation devoted significant resources in 2008 to helping two vulnerable and often under-served groups weather the current financial and economic crisis the nation’s seniors and U.S. military service personnel (see also Financial Industry Regulatory Authority FINRA).
The FINRA Foundation launched a campaign last April in Florida and Washington State to help seniors identify and resist persuasion tactics common to many types of fraud. The centerpiece of the Foundation s campaign to protect seniors is a 90-minute intensive workshop Outsmarting Investment Fraud. Follow-up surveys indicated that, for those who attended the workshop, responsiveness to fraud appeals was reduced by over 50 percent. The Foundation, which partnered with AARP, the Florida Office of Financial Regulation and the Washington Department of Financial Institutions to present the Outsmarting Investment Fraud program to seniors, will expand its fraud-fighting campaign to three additional states in 2009.
Fraudsters are taking advantage of the current economic turmoil to ensnare new victims. And we are working to provide the investing public with the tools and resources they need to protect themselves and their families, said John Gannon, President of the FINRA Foundation and FINRA s Senior Vice President for Investor Education. FINRA and the FINRA Foundation are dedicated to protecting America s seniors from investment frauds that can wipe out their life s savings and to helping military service members stay away from predatory loans and save for their future.
In 2008, FINRA continued its strong support of the FINRA Foundation by donating $5 million to support the Foundation s efforts to provide educational resources and training to at-risk and under-served segments of the investing public. The FINRA Foundation, which is the U.S.’s largest foundation devoted to investor education, has received $30 million in cash from FINRA since its inception in 2004. The Foundation has received an additional $7.2 million in fines from FINRA enforcement settlements and $55 million from the Global Research Analyst Settlement. Since 2004, the Foundation has approved more than $16 million in grants and devoted an additional $23 million to direct investor education. Military Families The FINRA Foundation conducted 21 financial education forums in 2008 at military installations across the country, including Camp Pendleton, CA; the Naval Station Great Lakes, IL; and Fort Gordon, GA. These forums provide servicemembers with tools and resources to manage credit responsibly, avoid predatory loans and save for their future. Since the Foundation began conducting these forums in early 2006, it has reached more than 16,000 servicemembers and their families at 68 forums in 39 locations throughout the world and at sea. In 2008, the Foundation s military financial forums reached more than 8,000 uniformed personnel exceeding the numbers for 2006 and 2007 combined.
The Foundation awarded 189 military spouses with fellowships to fund the education necessary to earn the Accredited Financial Counselor ® designation and to provide financial counseling and education within the military community. These military spouses commit to working or volunteering for up to two years in the financial counseling field serving the military. Military spouses who work and volunteer as financial counselors can draw on their own experiences to help other military families, while at the same time building a rewarding career that is flexible enough to conform to the demands of the military family lifestyle.
The Foundation has also made BrightScore ®, an online credit management tool, available free of charge to over 45,000 active duty military personnel and their spouses to help them manage their credit wisely. By using BrightScore ® tens of thousands of military families have received a detailed analysis of their credit history and score and a personalized action plan to help improve their credit. Nearly three-quarters of those scoring 620 or below who took advantage of the opportunity to pull their scores again improved their credit scores. Libraries SmartInvesting@yourlibrary ® is a community-based grant program launched with FINRA Foundation funding in 2008 to build the capacity of U.S. public libraries to provide financial education resources and services to library patrons. These libraries, which reach urban, suburban and rural communities, are helping new investors avoid costly mistakes, while also providing savvy investors with the detailed information they need. In the coming year, 25 libraries and library networks, serving more than 8 million people, will participate in Smartinvesting@yourlibrary ®. SaveAndInvest.org The FINRA Foundation maintains military- and senior-oriented pages on its Web site, http://www.SaveAndInvest.org. SaveAndInvest.org s military pages help military families budget, save for retirement and avoid predatory loans. SaveAndInvest.org s senior-oriented pages contain an array of financial education material from FINRA as well as from other organizations with expertise in helping seniors avoid falling victim to fraud. SaveAndInvest.org receives nearly 23,000 visitors per month. Investor Alerts FINRA s Investor Alerts provided with unbiased information they needed to make smarter investment choices during a very difficult year in the markets, including two alerts issued during the financial crisis, If a Brokerage Firm Closes Its Doors and Treasury’s Guarantee Program for Money Market Mutual Funds: What You Should Know. Earlier in 2008, FINRA also warned seniors of the perils of reverse mortgages, the dangers posed by 401(k) debit cards and Advanced-Fee scams. Fund Analyzer In late 2008, FINRA launched the Fund Analyzer, which combined the capabilities of FINRA’s Mutual Fund Expense Analyzer and Mutual Fund Breakpoint Search Tool, to help investors and brokers compare and evaluate the cost of investment options. The Fund Analyzer allows investors to search and compare up to three funds at once for fund analysis and information about fees and potential breakpoints (volume discounts applied to sales charges for investors who purchase front-end load mutual fund shares).
FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation. FINRA registers and educates industry participants, examines securities firms; writes and enforces rules and federal securities laws, educates the investing public and provides trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web site at http://www.finra.org.
Source: knowledgeplex
DEBTHELPER.COM 