H&R Block says form delays, fraud, and other issues hurt its 3Q filings, but e-filings helped

MarketsAssociated Press

Tax preparer H&R Block Inc. said Wednesday that the earlier opening of the IRS' e-filing system helped its results in the fiscal third quarter even as it processed fewer tax returns than it did a year ago.

The Kansas City, Missouri-based company said the earlier opening of the e-filing system brought in $309 million in additional revenue. However the number of tax returns it handled fell 4.2 percent. H&R Block said tax returns were down for a number of reasons: consumers were filing their taxes at different times, form delays and errors connected to the federal health care overhaul, price cuts by its competitors, tax fraud issues, and the elimination of some promotions.

Continue Reading Below

In February Intuit, the maker of TurboTax — the most popular do-it-yourself tax preparation software in the U.S. — stopped processing state tax returns for about 24 hours because of an increase in fraudulent filings. Most victims found out that a fraudulent tax return was submitted in their names when they filed their returns and got a rejection notice. Intuit said its systems weren't breached and that the personal information used in the filings was stolen from other companies.

H&R Block said Wednesday that it is working to reduce tax fraud by advocating for changes in the Earned Income Tax Credit application process and by pushing for minimum federal standards for paid tax preparers.

H&R Block said its loss narrowed to $36.9 million, or 13 cents per share, in the third quarter ended Saturday on revenue of $509.1 million. It reported $200 million in revenue a year ago. H&R Block's busiest quarter by far is its fiscal fourth quarter, which includes the federal income tax deadline of April 15.

The results were stronger than Wall Street expected. Analysts had forecast a loss of 28 cents per share on $445.6 million in revenue, according to Zacks Investment Research.

H&R Block shares added 18 cents to $33.60 in after-hours trading. Over the last 12 months H&R Block shares have risen almost 6 percent.

_____

Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on HRB at http://www.zacks.com/ap/HRB

_____

Keywords: H&R Block, Earnings Report