H&R Block statement on EITC

Recent media coverage around H&R Block and the Earned Income Tax Credit (EITC) is misleading and diverts attention from the real issues. This is not about competitive business interests. It’s about reducing fraud and protecting the future of the EITC. Anyone who says differently is not really committed to fixing a gaping hole in EITC eligibility or to reducing the billions of dollars in improper EITC payments that occur every year.

For starters, it’s an undeniable fact that the changes to the Schedule EIC – the tax form submitted to the IRS with the tax return – were developed by the IRS-Software Developer’s Working Group. This standing group is composed of the IRS and several members of the tax preparation industry. Together, the working group urged the Treasury department and IRS leadership to implement these changes for the past three years to help ensure all taxpayers – no matter how they file – submit an accurate return.

But more important than that clarification of the facts, this issue is about reducing tax fraud and protecting the future of the Earned Income Tax Credit. By its own estimate, the Treasury Department believes $16 – $19 billion in improper EITC payments were paid out in 2014. Many recipients likely elected to use do-it-yourself software because the IRS doesn’t require DIYers to provide the same level of information as those who use a paid preparer.

In addition to the billions in improper payments, with annual losses of that magnitude, it will likely result in greater scrutiny of the EITC program itself. That’s a threat to the millions of Americans who legitimately receive the EITC. Reducing fraud and helping to ensure correct eligibility will better protect this program and the people who really deserve it.

At H&R Block, we are committed to doing the right thing. Correcting this disparity in documentation requirements between DIYers and paid preparers – as called for by the IRS-Software Developer’s Working Group – and in the process – helping prevent fraud and protect those who are truly eligible for the Earned Income Tax Credit, is the right thing to do.