H&R Block Statement on
IRS Form 8863 Issue

MARCH 18 – 8863 UPDATE:

We are starting to see some clients either receive a new tax refund direct deposit date or even some clients who are now receiving their tax refund. We don't have a full scope of how many but the IRS continues to work hard at processing the impacted returns.

For those clients impacted that also have to file a FAFSA application, we have been in contact with the Department of Education and they have released Guidance for Impacted Taxpayers just moments ago. This provides both information for students and parents and also for colleges and universities. For additional information on this issue you may also visit Guidance for Schools for Student Aid.

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A message from CEO Bill Cobb:

Let me set the record straight about the Form 8863 issue that has affected you, our valued clients: we made a mistake when the tax return was sent to the IRS. And you deserve an apology, an explanation, and to know what we’re doing about it.

Here’s what happened: this year’s tax season started later than any in history (January 30th), followed by a further delay in form 8863 not being accepted until February 14. Not good for everyone. When the IRS began accepting the form, we immediately sent your returns, with the intention of getting you your refund as quickly as possible. In our zeal to move so quickly, we missed a step. Specifically there was a disconnect in the transmission of form 8863 from our delivery system to the IRS E-file system, and this caused the delay many of you are experiencing. We fixed the transmission issue right away, but couldn’t undo it for those that had already been sent.

I want to make it clear that this was absolutely not the fault of your tax professional; your return was prepared accurately. This was an issue with the form transmission. This was our mistake — and I sincerely apologize. I want you to know that we hear the frustration of those impacted by this issue loud and clear, and we're working every avenue we can to get your refund to you as fast as possible.

We have been and remain in daily communication with the IRS, who are doing everything they can to speedily process all returns. We know that clients are beginning to see progress, funding dates are being communicated and refunds are definitely being funded. But we also recognize that in an already delayed season, it’s still not as fast as we want, and we’re not letting up until every client has his or her refund.

We are also committing to more frequent and regular updates with you as we have news to share, and we know we can do a better job here too.

Finally, I know an apology won't put your tax refund in your hands right away, and many of you still have questions. But right now, our singular focus is to get you that refund, and we have all hands on deck to help make this right.

Bill

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Form 8863 Statement - March 11, 2013

H&R Block has confirmed with the IRS that there was an issue with a limited number of software company products that affected some tax returns filed between Feb. 14 and 22, 2013. These affected returns included certain education tax credits claimed on Form 8863.

H&R Block has worked with the IRS to expedite a solution to this issue for our affected clients.

We are communicating directly with our impacted clients to assure them that we are doing everything we can to expedite their returns. The IRS has informed us and other impacted providers that they are currently processing these returns. This review process means the IRS may need 4-6 weeks from this date to issue a refund. H&R Block clients are already reporting a change in their refund status since the IRS began processing these returns.

The IRS is reminding taxpayers to check “Where’s My Refund?” on IRS.gov to determine the status of their refund. Please note this website is updated overnight by the IRS, so you don’t need to check it more than once a day.

At this time, there is no additional action needed if you are an H&R Block client who:

For those H&R Block clients who have received a letter from the IRS and have yet to respond, please call your local H&R Block office or 800-HRBLOCK. The office or customer service agent will be able to serve you and provide next steps.

The IRS has stopped sending letters based on this Form 8863 issue to this group of affected H&R Block clients.

If affected clients applied for financial aid through the FAFSA program, there are manual steps they can take that will allow their FAFSA application to proceed while their return is still processing.

The Department of Education suggests:

This information is posted on the FAFSA section of the Department of Education website http://www.fafsa.ed.gov/.

H&R Block appreciates that this issue may cause problems for our clients and we are doing everything in our power to address the processing of these returns. We will continue to update clients as more information becomes available. We thank our clients for their patience while we continue to work with the IRS to expedite the filing process on their behalf.