H&R Block Predicts Drop In Growth Of Tax Filers Next Year
By by Leroy Baker, Tax-News.com, New York
16 December 2003

US tax preparation specialist H&R Block is forecasting a smaller increase in the number of individuals filing tax returns in the coming tax filing season due to a recent rise in the nation’s unemployment rate.

Speaking to Dow Jones Newswires last week, the firm’s Chairman and President Mark Ernst revealed that the IRS has come to a similar conclusion, and has reduced its forecast on the expected increase in tax filers to 0.5% from the usual 1.5%.

"Our analysis of the impact of the economy has us seeing the same thing,” said Ernst. “While overall economic numbers are picking up, the employment numbers haven't improved dramatically.”

In response to the tougher economic conditions for the tax preparation industry, H&R Block plans to expand its range of financial services away from the traditional tax aspect to cover other areas of financial planning such as assisting homebuyers to purchase a house, which will complement other non-tax services such as mortgage lending.

However, tax preparation remains the mainstay of the firm’s business. H&R Block receives most of its income during the fourth quarter of the fiscal year, according to Dow Jones.

Despite a relatively small decline in the number of US tax returns prepared in 2003 (16.3 million compared to 16.9 million in 2002), the firm increased its net income over the same period from $434.4 million to $580.1 million.

.