Tax preparation giant H&R Block, embarrassed by a filing glitch this tax season that contributed to a delay in refunds for hundreds of thousands of clients, is offering up a refund of its own with a $25 gift credit card to those affected.
A letter offering up a personal apology and the $25 MasterCard cash card began arriving in the mailboxes of affected customers this week.
“We know we cannot erase any frustration or inconvenience that you experienced, but we do want to sincerely say, ‘We’re sorry,’” Amy McAnarney, president of the firms retail client services division, wrote in the letter. “…We serve almost 15 million clients in our offices each year, and once in a while, things don’t go as perfectly as planned.”
The 2013 tax filing season got off to a rocky start with last-minute changes dictated by the New Year’s Day fiscal cliff deal and delays at the IRS in putting together some key forms.
But errors based on H&R Block’s internal filing systems also contributed to the delays for many customers. In particular, a new IRS rule — in which tax preparers who could previously answer a question “No” on a key form simply by leaving the space blank were this year required to actually enter an “N” — was not updated in the tax giant’s system and led to delays at the IRS.
Federal officials said some 600,000 returns were affected by the glitch, resulting in delays for filers expecting refunds of up to six weeks.
In addition to holding up refunds, the delays also caused headaches for parents filing federal forms regarding college student aid this spring, with many students unable to secure their financial aid packages by the deadline set by colleges.
Ms. McAnarney in her letter said it was not human error but a “system disconnect” that caused the problem. She also acknowledged that the company was slow to respond to complaints about the delays, which flooded the firm’s Twitter and Facebook accounts earlier this year.
The company “wanted to communicate with you as clearly and quickly as possible,” she wrote. “However, in tracking down answers, and more importantly, solutions, our early communication with you took longer than we would have liked.”
But a $25 gift card may not be enough to buy off some unhappy clients. The company has been hit by at least four state class-action suits by customers over the delays, including one filed Wednesday in a federal court in California.