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  • Writer's pictureKeith Gantenbein

H&R Block Preying on Americans with Tax Law Changes

In an effort to create more business, one of America’s top tax preparation firms, H&R Block, along with TurboTax’s Intuit Company, argue and spend big bucks lobbying on Capital Hill to NOT make taxes simpler.

Thinking only of how much profit they can stuff into their pockets, they prey on the poorest of taxpayers.

H&R Block’s latest and most deplorable effort involves their initiating and pushing the Senate Appropriations Committee to pass a funding bill to make the Earned Income Tax Credit (EITC) form four times longer, making the form even more confusing for taxpayers. Around two-thirds of all EITC claimants pay to have their returns prepared, insuring huge amounts of the EITC money are funneled into the pockets of tax preparers, such as H&R Block.

The Earned Income Tax Credit is an anti-poverty program that refunds money to America’s poorest families. The EITC is one of America’s top anti-poverty programs and encourages people to work in order to earn the tax break. The Census Bureau estimates the EITC, as well as the Child Tax Credit, helps approximately 9.4 million people out of poverty each year.

The EITC is one of the few benefits America has to help low-to-moderate income workers a refund each year. The amount of EITC refund is dependent upon the taxpayer’s income and the number of children he/she has.

Presently, taxpayers only have to fill out a one-page tax form to qualify for the credit. Turning this one-page form into 4 pages is disgraceful, not to mention more complicated than the average person can understand.

The IRS has a FREE program to help recipients fill out these forms. The IRS operates free and reduced-payment tax preparation centers for low-income families. Our very own Denver tax attorneys have worked pro bono for this free IRS low-income clinic to help Americans file their taxes. For FREE. The program is awesome.

Unfortunately for H&R Block, free tax preparation programs for low-income Americans take money out of their pockets. They lobby and push for new laws complicating the tax system even more than it already is. The lower wage earners end up having to pay someone to prepare their taxes for them. Companies like H&R Block target the lower-income, working class Americans.

H&R Block has not proposed a single change to tax refunds for higher income-earners such as The Mortgage Interest Deduction Tax Refund, or the Charitable Deduction Tax Refund. Higher-wage taxpayers typically use accountants. H&R Block hasn't targeted Hedge Funds, Capital Gains Taxes or any tax programs for the higher-income groups.

H&R Block has also begun pushing for longer, more complicated forms for other refund programs for low-income taxpayers such as the Child Tax Credit and Premium Tax Credit (for subsidized Obamacare).

Robert Greenstein, one of America’s leading experts on federal budget and tax policy, and President of the Center on Budget and Policy Priorities, also disagrees with the proposed change: “Were this directive implemented, no one should be surprised to see large numbers of individuals who now file their own returns either giving up and not claiming the EITC due to the added complexity or turning to paid preparers, who could charge hundreds of dollars for their service.”

H&R Block CEO William C. Booth claims, the new law is “a way to reduce improper payments.” If that were the case, wouldn’t H&R Block’s proposed changes target all refund programs, not just the ones directed to help the poor?

The proposed new law has already passed the Senate Appropriations Committee.

We urge all taxpayers to write, email or call your State Senators and Congressman and take to social media to voice opposition. Use the FREE low-income tax preparation centers funded by the IRS.

The irony is that H&R Block has had more complaints filed against the company due to the Block’s errors on EITC forms than the taxpayer filling out the form himself, and a recent IRS study showed tax preparation centers (not tax attorneys or CPAs) make more errors in filing taxes than indivual's who file thier own taxes.

If you have a tax issue, contact our IRS and tax law attorneys, locted in Denver, Colorado at 303-618-2122, or visit our the Gantenbein Law Firm website.

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