BLOG » H&R Block CEO Encourages Stifling of Competition
Ahhh H&R Block. You really are the McDonalds of income tax preparation. It’s like I always say, if you wan’t a good burger, you don’t go to McDonalds. Sure, it tastes good going down, but you’ll be sorry later…
Here’s H&R Block big wig Russ Smyth being interviewed about why he favors the new tax preparer regulations. One of his answers: Because it will drive smaller Mom & Pop industries out of business. He then quickly followed up that statement with “H&R Block encourages competition..,”
Well, sir, it’s easy to ecourage competition when a) you really have no competition and b) when you are simultaneously driving your collective competition out of business.
As the commentors in the above clip mention, this regulation drive is rumored to have been spearheaded by H&R Block to ultimately do just that: drive more business their way. What will be most interesting to watch is exactly who the IRS will pursue to enforce these new regulations. Will it be the “Mom & Pops” or will it be these Mega-corproations?
R&G Brenner was founded in 1941 under the name the Tax Center. We were once a “Mom & Pop”, and despite our growth over the years, I still consider this family owned private business to be a “Mom & Pop”. Many of our tax consultants and clerical staff have been with us for decades, and this is the way I hope it remains.
Not so with H&R Block. I know this because we have a few ex-H&R Blockpreparers on staff. When a tax preparer amasses a large client base at H&R Block, they are usually offered a “promotion” to become a manager. The net pay almost always is less than if they continued on as a commissioned based tax preparer. If they refuse this “promotion”, they are rewarded by being fired, and the tax clientele they’ve amassed & serviced over many years are distributed to tax preparers that could have as little as 8 weeks training (and that make a lower commission).
We have a crazy philosophy here at R&G Brenner: we only hire tax preparers with at least 2 years of experience & we reward our associates for growth.
With the majority of tax offices in the United States comprised of franchise operations like H&R Block, Jackson Hewitt et al, it should be safe to assume based solely on percentages, that the new rules governing paid tax preparers would affect these locations more often from an enforcement point of view as is illustrated in these cases here, here and here.
So when the host of the video clip above concluded to Smyth that the IRS may soon be coming after H&R Block with these new regulations, he should be right. However, that sly smirk on Smyth’s face was a tad bit suspicious. We’ll soon find out…
Category: Tax & Financial News | Tags: fraud, H&R Block, HRB, IRS, mega corporations, mom & pop, paid tax preparers, regulations, Russ Smyth, stifling competition 4 comments »
January 8th, 2010 at 1:25 pm
Everyone wants a monopoly… That’s what the FTC, DOJ, etc. are for – to protect the economy and consumers from sharks. Speaking of, it seems that they have been in the news lately with the $19MM settlement to past customers and $750K to the NY DA.
But they were successful in prompting the IRS to enact some new regulations;
“Also Monday, the Internal Revenue Service said it intends to regulate tax-preparation companies, requiring employees of the companies to pay a registration fee to the IRS, pass a “competency” exam and have 15 hours of education a year. Previously these employees weren’t required to meet federal standards.”
Its probably for the best…
January 12th, 2010 at 1:40 pm
As a former Block preparer who is happy to be working for R&G Brenner, I feel uniquely qualified to comment on this matter. What is left unsaid if that while Block has an excellent training program, especially for its in-service preparers, the client never knows if they are going to be serviced by a competent, experienced preparer or someone fresh out of their training program who has NO experience in dealing with real-life tax situations. If the test administered by the IRS is truly a competency test, at least half of the less experienced preparers working for Block will not pass. Block will fight that possibility to the death.
January 12th, 2010 at 3:05 pm
And we are happy to have you too Mike! If the IRS exempts HR Block from any or all portions of their future testing policies, then we know there was some back room dealings going on.
January 14th, 2010 at 8:57 pm
Thanks for the revealing video clip, clearly the panel questioning Mr. Smyth have hit on the most important issue, no one besides H&R Block lobbied for this regulation or any like kind counterpart regulation from the IRS. Stifling competition has never benefited any consumer and the spin Mr. Smyth puts on the “call” is well rehearsed.
I’ve been to an H&R Block office, in Lower Manhattan, needless to say my experience was not memorable other than being greeted by a mob of eager prepares who’m to me seemed more like part time cashiers eager to ring me up. The sophistication level was akin to that of an overseas telephone operator rather than a seasoned Tax Preparer looking to advice me and earnestly review my financial records.
Keep these posts coming, I appreciate your effort in bringing me tax news! Love your new site and especially this blog.
Sincerely,
Tax Payer.