Reply
Wed 15 Mar, 2006 06:28 pm
Spitzer charges H&R Block with fraud By Joe Giannone and Bill Rigby
2 hours, 33 minutes ago
NEW YORK (Reuters) - H&R Block Inc. (NYSE:HRB - news) the largest U.S. tax preparer, fraudulently marketed retirement savings plans that caused hundreds of thousands of mostly low-income clients to lose money, New York State Attorney General Eliot Spitzer charged in a lawsuit filed on Wednesday.
The suit seeks $250 million in fines plus refunds after H&R Block steered roughly 500,000 tax return customers to invest in individual retirement accounts, but failed to disclose high hidden fees that actually outpaced interest earned on the accounts, the attorney general said.
As a result, about 85 percent of these customers lost money, Spitzer said.
The suit is the latest in a line of legal and accounting issues faced by H&R Block and comes at a crucial time for the tax preparer as millions of Americans get ready to file taxes before the April 17 deadline. Its shares fell more than 4 percent.
H&R Block used the retirement accounts, with an minimum initial deposit of $300, to try to make sure tax customers returned every year, the suit charges.
"This is the bait designed to keep consumers coming back," Spitzer said at a news conference in New York. "They (H&R Block) did not have the decency or the sense of fairness to disclose to these low-income clients that the fees that they were imposing would mathematically outweigh the interest being paid on these accounts."
If H&R Block did defraud clients, can those clients claim a deduction on their income tax when H&R Block prepares it? Or reduce Block's charges for the tax work?
Or maybe they would do better to try some other tax preparer...
Step One: Ask the IRS for the rulings on deductibility of losses from H&R Block.
Step Two: Change your tax preparer pronto.
My thoughts exactly.
Anyway, I've already got my taxes done, and NOT by H&R Block.
Me too! I've been using Turbo Tax for many years, and have been relatively happy with the results. The only problem has been the IRS's ignorant staff that double's some income to increase our tax liability.
I saw this article as well! H&R is really under heat right now. As we were discussing in a thread about taxes earlier, I wonder how many of these fees and "frauds" are due to H&R policies or policies from predatory lenders like HSBC. Do they get pulled into these types of lawsuits as well?
Jonsey, I don't find it surprsing for companies like H&R Block to do whatever it takes to increase their bottom line profit. That's the same crime perpetrated by most of the big accounting firms; they forgot about ethics for the big bucks.
You are right. I suppose I'm just hoping that someone will finally get some legislation passed that will hinder fees like this...that way places like HSBC and H&R block won't be able to get away with it!
Don't build up too much hope. The problem will never go away, because congress and accounting firms are part of the problem. They both play games at the expense of average Americans.
That's a fact of life that will not change during our lifetime.
I know you're right -- one can hope...although, if enough people harrassed banks like HSBC or congress, I'm sure it could help a bit
I'm just so frustrated that they get away with this. At least use our taxes/money towards the programs that need it!
But I know I'm being too opptomistic...one can hope I suppose
Hope is the only thing that's left without totally divorcing ourselves from this world - which btw is almost impossible.
Lay is a dead duck.
Enron's Lay lied to credit agencies: witness By Matt Daily
Wed Mar 22, 7:01 PM ET
HOUSTON (Reuters) - Former Enron Chief Executive Ken Lay lied to credit agencies to prop up the energy trader's ratings even as its cash dwindled, the company's former treasurer testified on Wednesday.
Former Treasurer Ben Glisan, 40, said Enron forewarned credit rating agency Moody's Inc. it would cut the value of some overvalued assets by $1 billion in October 2001, but Lay telephoned the agency to tell an analyst there the company had no other skeletons to hide.
In fact, Glisan said, those asset write-downs should have been at least $3.5 billion, but he and Lay knew revealing such dramatically bad news would send the company into a death spiral.
"I and Mr. Lay provided assurances that there were would be no further write-downs," Glisan said. "We knew there were large embedded losses in several parts of the company."
Lay and Skilling continued to declare their innocence, but to nobody that believed them.
They will now get what they are due.
Stumble It!
Tweet This
Bookmark on Delicious
Share on Facebook
Share on MySpace