Tax Tips & News

H&R Block CEO Encourages Stifling of Competition - R&G Brenner

Written by R&G Brenner | Jan 8, 2010 11:40:11 AM

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…