It appears that Trump, the Republican front runner in the 2016 presidential election, is going after H&R Block via one of his many campaign rants. H&R Block’s Message To Trump is quite simple. He says that he wants the federal government to change the tax code so much that it puts H&R Block out of business.
The ability to make the federal tax code easier to understand has always prompted public debate. For the last twenty years, Steve Forbes has proposed a flat tax that requires just a one page tax return.
However, the United States tax code is still very hard for the average person to decipher because it has so many types of deductions, credits, exemptions and brackets to understand.
Last year, one out of every seven taxpayers had their taxes prepared by H&R Block. The company had about 17 percent of the physical tax preparation market share, and about 12 percent downloaded its software to file taxes digitally.
Thus, Trump feels that H&R Block is successful because no one understands the federal tax code. He believes that H&R Block doesn’t want the code to be changed for this reason.
Quite naturally, H&R Block denies this assertion. Its CEO, Bill Cobb, says that his company doesn’t benefit because of the current tax code. He believes that Congress has issued numerous programs that help Americans, but they can’t take advantage of them until their annual taxes are filed. He also says the code is very complex, and his company undergoes advanced training as a result. Cobb, however, agrees that the law could be changed to make things easier for everyone involved.
However, Cobb’s company was recently criticized for another tax reason. The media says that H&R Block wants to make it hard for taxpayers who want to file their own taxes to prove eligibility for the Earned Income Tax Credit. However, the company claims that it just wants these filers to have the same rights as their paying customers, who by the way, have to file with a complicated tax form. The company also says that it wants to decrease the amount of refunds that the government pays on fraudulent tax forms. This amount is about $16 to $19 billion annually.
It doesn’t look like the federal tax code will change anytime soon, and appears that H&R Block won’t be going out of business either. Since it isn’t regulated as a savings and loan holding company anymore, its balance sheet looks much better. The company’s shares actually went up when it announced a new capital plan.
Trump is on the campaign trail, and HR & Block is still preparing taxes and getting ready for tax season. In addition, taxpayers still need help preparing their taxes. As a result of the Affordable Care Act, taxpayers can look forward to getting their W-2s and a 1095B or C. This is an additional form that says they have Obamacare. But the CEO of H&R Block believes that his company is ready because of the extra training received.