High unemployment rates and fewer numbers of taxpayers who owe have translated into more than just headaches for IRS: many tax preparers across the country saw a dip in 2010. Among them is H&R Block, the largest tax preparer in the country.
Overall, H&R Block reported a decline in tax preparations at its tax offices. The number of returns prepared fell by 6.6% while tax preparation fees decreased 5.5%. While the company noted losses on its in person tax preparation services, purchases of tax preparation software packages appeared to be up, likely a nod to a weak economy.
The decline in performance did not go unnoticed at the top. After the disappointing tax season, the tax prep giant has announced that it will lay off 400 workers nationwide, with a lion’s share of those from the company’s headquarters in Kansas City, Missouri. The company also announced the closing of 400 tax offices across the country.
H&R Block CEO Russ Smyth said about the lay-offs and closings that, “[c]hanges like these are never easy and we appreciate the hard work and loyalty of the affected associates. However, these steps are necessary to improve our business performance and better serve our clients.”
While Smyth maintains that the cuts (which they’re calling “restructuring”) will lead to a stronger company, some have their doubts. This is the second big cut for Block in recent years: two years ago, a Block subsidiary announced that they were letting 325 employees go. However, shares of H&R Block stock closed a bit higher after the release of this latest news.
I haven’t heard any official news from Jackson-Hewitt, the nation’s number two tax preparer; they’re slated to release their preliminary earnings reports on May 27.
