Much has been made the last few days about Jackson Hewitt suing H&R Block for mis-leading ads. JH has two issues. First, some of the ads currently running suggest that no one is offering the RALs. While HRB isn't able to offer those products, JH and many independent offices do have RAL programs. But it's the second set of ads that tickle me. HRB has run a series of ads that JH contends say that they (HRB) found errors in 2/3 of the JH returns they reviewed. Kelly Erb at TaxGirl did some searching and didn't find an ad which specifically mentions JH. She did find a HRB reference to errors in 2 of 3 returns prepared in "other retail tax preparation offices". The lawsuit is a funny diversion while I wait for people to come in. I've heard the "no one doing RALs (or a version of it) ad. In fact, I called the local office and was told 2 weeks was the fastest any business could get a refund back. But it's the errors claim I really want to talk about.
I want HRB to define "errors" for the purpose of this claim. Are they including spelling errors or a W-2 or 1099 being a dollar or two off? Are they working with the same information that the original preparer had? (It's amazing how taxpayers can learn how to answer questions after talking to someone else.) The ad is another example of HRB spin (maybe they should change their logo to a top). First, they are dealing with a group of returns that people are already concerned about. The taxpayer didn't like the result, or questioned something, or was just looking for some money and decided to check their returns just in case. Not an independent sample. Then, to sell a service (and future services), they have to find a mistake. It doesn't have to be a major mistake, just something that will shake the taxpayer's confidence in their current preparer. I'm actually surprised that there were a third of the returns where they couldn't find errors.
My other question is how would HRB returns fare under the same conditions? Can they actually say their returns are perfect? Are they willing to let an indpendnet auditor use their "error" test to their returns.
Tax software has taken some errors out of preparing a return. There is less chance of any math error cropping up. SSN and dates of birth carry forward (at least in most professional software). Some programs have double entry of items for verification. But tax preparation is interpretive. The preparer takes the facts and sees how they apply to the tax code. Another preparer may not interpret the rules the same way. They might not be given the same facts, have some outside info, or they might have new clarification from the IRS or courts on that rule.
If you have a concern on your return, please do get a second opinion. Then look at the "errors" found and see if they are real issues or the reviewer is simply trying to get your business by suggesting your preparer made a mistake. Before you let the reviewer "fix" the return, talk to your preparer. If they did make a mistake, they should be willing to fix the problem for little or no cost. Or, explain to you why they don't believe they are wrong.