25

I have been doing my taxes for 25 years with TurboTax. Like others, I was a bit upset at them for doubling the price of their software, so I decided I would make an appointment with H&R Block, thinking it would be a good idea to boycott TurboTax for one year, and perhaps it was time for a tax "professional" at Block to do my taxes this year since I've been doing them so long by myself.

So I went in with all my papers in order, and sat there as I basically told the person what numbers to put where. At one point, I almost said "move aside" because I could have plugged in the numbers more quickly.

They wouldn't tell me the price of their fee until it was over, and to my surprise it was $220. They provided me with absolutely no professional tax advice, and on top of that my refund was about $500 less than I normally get.

I told the person that she was not to file my taxes, I had to think about it. So I came home, and redid my taxes in about 15 minutes on the online TurboTax website. While doing this I discovered that I had overlooked one piece of paperwork, which resulted in about $500 more of a refund. I did not file yet.

Long story short, am I obligated to go back to H&R Block and have them add the new deduction that I discovered and pay them the $220 for something I could do myself online for $50? Again, I wouldn't mind paying if they had 1) been up front about the fee and 2) provided me with even a tiny bit of professional advice, which they did not.

Chris W. Rea
  • 31,671
  • 16
  • 102
  • 190
NickyB
  • 267
  • 3
  • 3
  • 1
    Did you take the completed tax return home with you? – Ben Miller Mar 10 '15 at 02:48
  • Are you asking whether you're obliged to let them file for you, or are you asking whether you're obliged to pay them $220? – Steve Jessop Mar 10 '15 at 10:09
  • 5
    Man, imagine all the stuff you could get for free if all you had to do was tell someone that you didn't think you should have to pay for it. – C Bauer Mar 10 '15 at 11:18
  • 2
    No, the H&R person never printed anything for me to take home. I just told her not to file and that I would need to think about it. And I got up with all my papers that I had brought and walked out. I feel slightly bad that she did actually plug in the numbers that I provided her, so I think I owe them something because I took up someone's time to do this, even if a 12-year-old could have done the same. – NickyB Mar 10 '15 at 03:25
  • 11
    If you had wanted to boycott turbo tax software you would have switched to another software package. Hiring a person was always going to be more expensive. Time is money. – mhoran_psprep Mar 10 '15 at 12:16
  • I would say you are not obligated to pay the $200, but offering the person that did your taxes a gift card of 25 or 50 dollars might be a nice gesture. – Pete B. Mar 10 '15 at 13:27
  • 7
    Unless you signed an agreement with them, or took the product of their services home, you are under no obligation to pay. Though you may want to read their terms of service, and consider if anything you did would count as signing an agreement. – Zibbobz Mar 10 '15 at 13:59
  • 23
    They can't perform a service for you without telling you the fee and then expect you to pay whatever fee they come up with. That's not how contracts work. – David Rice Mar 10 '15 at 14:16
  • 3
    The best action might be to call the person who prepared your taxes, tell them thanks for their time, and let them know you filed it yourself. You could then ask if you owe them anything. – DoubleDouble Mar 10 '15 at 15:57
  • H&R Block Online, TurboTax, TaxAct...you've got options. – Chris Pfohl Mar 10 '15 at 20:39
  • 3
    Agree with @DavidRice, I don't see how you could have entered a contract without price coming up. – Andy Mar 10 '15 at 22:19
  • Can you explain what deduction they missed? – JTP - Apologise to Monica Mar 11 '15 at 01:48
  • @JoeTaxpayer they didn't - he did. – littleadv Mar 11 '15 at 04:52
  • @littleadv "my refund was about $500 less than I normally get" - So his complaint here is due to his missing paperwork? Got it. – JTP - Apologise to Monica Mar 11 '15 at 11:58
  • 2
    @JoeTaxpayer The complaint is that the computed refund was smaller than expected and that the person preparing the return took longer to fill out the forms than it would have taken the OP. That the refund was smaller because the OP forgot to provide complete information is conveniently ignored. That a person not completely familiar with the details took a little longer to fill out the forms is ignored. The OP wants someone to say that he owes no money to H&R Block, and he has received this validation in a highly upvoted answer. The same people presumably downvoted littleadv's answer... – Dilip Sarwate Mar 11 '15 at 17:30
  • 2
    There's a difference between a legal obligation and a moral obligation. I would be inclined to pay if I have used up someone's time. – superluminary Mar 11 '15 at 20:12

3 Answers3

34

If you did not sign a contract with them, then you do not owe them a return visit, much less a fee.

This is one of the downsides of running a business where you offer to do work for a client and tell them that the fee depends on an outcome that you can only reach at the end of the work.

If you did sign an agreement or contract, then you need to carefully read the provisions. It may be that an uncompleted or unfiled tax return will result in a nominal fee, but they should not be charging you the full amount since you did not file through them (one of their services) and you did not receive the completed tax return.

Note that their online site states, "85. By authorizing H&R Block to e-file your tax return or by taking the completed return to file, you are accepting the return and are obligated to pay all fees when due." So as far as I can tell, since you did not authorize them to file your taxes, nor take your completed return, you are not obligated to pay any fees. (to see the disclaimers, click on any superscript number)

Until you accept the return, you are not obligated to pay any fees.

It may be that you still feel you owe them something for their effort, and if that's the case go and talk to them. They may or may not accept a payment for the work they've done, but since they've not provided you with any of the results they may choose not to accept a fee for legal reasons. It may be that if you explain to them your reasoning, they will give you a significant discount (since they've already done most of the work) so that you can still boycott turbotax without paying them quite so much for the tax preparation.

It's your choice, but their business model allows for the result where they will end up doing tax preparation which they are never paid for. If they charged a flat rate up front, or listed their fees per document rather than a percentage of the refund, then this behavior might be unethical, but since this is their business model and this is by design, then you should not feel guilty for choosing to leave them if you haven't signed an agreement.

Adam Davis
  • 1,780
  • 12
  • 13
  • 1
    I have a suspicion that the ones who need to have you sign a contract with a nominal fee are likely the ones who have a problem with people deciding not to file with them.. – DoubleDouble Mar 10 '15 at 16:27
  • 10
    In many fields of business, it is routine for a business to conduct for free some sort of consultation to allow a customer to decide whether to purchase services. Ethical businesses should endeavor to ensure that customers do not incur obligations of which they could reasonably be unaware. A business may legitimately demand a promise of payment before even considering a client's case, but any work performed without such a promise should be considered to be done on speculation [assuming the client would be sufficiently likely to purchase the result to make the risk of abandonment acceptable]. – supercat Mar 10 '15 at 16:32
  • "Until you accept the return, you are not obligated to pay any fees." - that doesn't follow from the quote you mentioned. The claim "if you do X it means that you formally agreed to pay" doesn't mean "if you don't do X you don't have to pay". Basic logic. – littleadv Mar 11 '15 at 04:36
  • 1
    @littleadv If you combine that statement with the "If you did not sign a contract" statement, then I would say that legally, "Until you accept the return, you are not obligated to pay any fees."" is true. In other words, in the absence of a contract which would cause him to pay fees, and in the absence of work which they state will cause fees, then he doesn't have to pay fees. – Adam Davis Mar 11 '15 at 10:48
  • 1
    @AdamDavis I believe a contract was made. He was told the price is contingent on the work done, i.e.: he was told the work is not free. I don't know how well you're versed in contract law, but a verbal agreement is a contract. He agreed to pay. – littleadv Mar 11 '15 at 15:06
27

H&R Block is a huge company, they stand behind their work. As you might expect, they have a "satisfaction guaranteed" policy:

"We’re so certain that you’ll have a positive experience that you don’t pay until you’re satisfied."

You saw no value in the service regardless of whether or not you had that extra paperwork. If they ever follow up and ask, tell them exactly why you went with the $50 option instead of the $220 option.

You don't need to go back.

Rocky
  • 23,960
  • 5
  • 67
  • 90
  • 1
    While Adam Davis' answer is better for the general approach, this is the better answer for the specific question. – Alexander Mar 11 '15 at 18:42
3

It seems to me that services were provided, and the fact that the fee depends on the amount of the work done was communicated to you ahead of time.

I'd have to say that yes, you have to pay for the consultation. The fact that you're unsatisfied with the results (in part due to your own omission of an important piece of information) is irrelevant. So is the fact that you could have done it yourself. After all, you knew that already when you went there, and you still went there.

They don't charge for filing your tax return, they charge for preparing it, which they did.

Just so you know, H&R Block employees are not tax advisers in any way, and will not provide you with any advice other than where to put what number from the forms you brought to them. They're not allowed to, even if they had the knowledge. Only licensed EAs, CPAs or attorneys are allowed to provide tax advice, and those rarely work in H&R Block retail stores (maybe occasionally as supervisors/consultants).

Clarification is in order:

The sentence "By authorizing H&R Block to e-file your tax return or by taking the completed return to file, you are accepting the return and are obligated to pay all fees when due." means that they will not e-file your tax return before you provide payment options. However, it doesn't mean that if you don't e-file with them their work would be free. That is basic logic: from the claim X=>Y doesn't follow ~X=>~Y.

It may be that they'll agree not to charge you due to the satisfaction guarantee or what else, but it is definitely not a given. There's nothing in that particular sentence that you can hinge on when defending your right not to pay for the services provided to you.

That said, you're most definitely not obligated to file through them.

littleadv
  • 172,884
  • 15
  • 295
  • 479
  • 10
    -1: Having to pay for the consultation is entirely dependent upon the service contract. Adam's answer specifically covers this point directly from said contract. The condition for which payment is required was not met. – Myles Mar 10 '15 at 18:16
  • @Myles I didn't see anything in the OPs question about that. Based on what are you saying that the payment is not required? – littleadv Mar 10 '15 at 18:34
  • 2
    @littleadv OP question "Am I obligated to pay?" HRBlock service agreement section 85 (as per Adam's answer):"85. By authorizing H&R Block to e-file your tax return or by taking the completed return to file, you are accepting the return and are obligated to pay all fees when due." – Myles Mar 10 '15 at 19:00
  • @Myles and others - while Adam's answer is what the OP wants to hear, in reality the services are rarely provided for free. The fact that e-filing is a formal acceptance of the fee doesn't negate the obligation to pay without the e-filing. Unless you provide a quote that says "you don't have to pay unless you file with us" I don't see how that section 85 is in any way relevant. – littleadv Mar 11 '15 at 04:34
  • 7
    Did you mean "from the claim X=>Y doesn't follow ~X=>~Y" ? What you say at the moment ("X=>Y doesn't follow ~Y=>~X") certainly does follow in logic. – GS - Apologise to Monica Mar 11 '15 at 09:05
  • 1
    If they don't charge up front, and they don't have the OP sign a contract, and they explicitly state when they do charge, then it doesn't follow at all that the OP is obligated to pay. In the absence of a contract, any work H&R block does prior to the contract or payment and transfer of work product is speculative on H&R Block's part. They are hoping that the OP chooses to file with them or accept the tax return, and when that happens they will charge the OP accordingly. Up until that point, though, this is speculation on their part, and essentially a loss leader. Not obligation. – Adam Davis Mar 11 '15 at 10:55
  • 1
    I agree with littleadv that Adam's answer is what the OP wants to hear. The OP forgot to take with him to H&R Block a piece of paper that would have made the return show the "usual" tax refund. He was pissed off at H&RB because the putative return showed a smaller refund, and because it took H&RB more time to enter the numbers into their computer than he would have taken. Remember the definition of a religious fanatic as someone who knows exactly how God would have ruled in any specific situation if only God knew the facts of the case as well as he did? Sure it took H&RB longer. Sheesh! – Dilip Sarwate Mar 11 '15 at 12:36
  • 1
    @littleadv The fact that they were not able to quote the OP a price upfront makes the clause regarding under what circumstances costs are incurred extremely important. – Myles Mar 11 '15 at 13:25
  • @littleadv Services are rarely provided for free due to a typical cost model of "This service costs X. Would you like us to go ahead?" – Myles Mar 11 '15 at 13:26
  • @DilipSarwate What the OP wants to hear is not relevant to how contract law works. It entirely depends on what the agreement said and if there was one in the first place, not the missing piece of paper or anyone's feelings about the process. – Matthew Read Mar 11 '15 at 14:57
  • @Myles Very rarely tax preparers will quote a price upfront. Yet, they don't work for free. – littleadv Mar 11 '15 at 15:04
  • 1
    It will soon be time to "take this to a chat room." Interesting to see an answer voted +12/-10, for the record, I voted up. – JTP - Apologise to Monica Mar 11 '15 at 15:06
  • 1
    @JoeTaxpayer That's pretty common when there's a clear conflict between what people want and what people have. People very often upvote and downvote based on whether they like the answer, not based on whether or not it is correct. I'm used to it. – littleadv Mar 11 '15 at 15:09
  • @littleadv Matthew Read hit it exactly, details of the contract define payment obligations. – Myles Mar 11 '15 at 15:25
  • 1
    @Myles exactly, and I have yet to see any piece of information showing that unless you file with H&R Block they work for free. That is not how service providers work, unfortunately. – littleadv Mar 11 '15 at 15:26
  • @littleadv I suppose any additional fees will be outlined in the specific contract the OP signed. I think we can agree that the OP is obligated for any additional fees outlined on the contract signed. If the contract doesn't include them no obligation exists. – Myles Mar 11 '15 at 15:40
  • 1
    @Myles generally, when dealing with tax preparation, it is hard to estimate the "additional fees" ahead of time. I understand you want to defend the opinion that "I didn't like the service ergo I need not pay for it", but that's not how it works. Even if you didn't sign an actual contract on a piece of paper - accepting verbally the claim that "our fees are contingent on the work done, so we'll tell you in the end how much it costs" is an agreement to pay. – littleadv Mar 11 '15 at 17:04
  • 2
    from the claim X=>Y it certainly DOES follow that ~Y=>~X.

    If ~Y then X must be false, otherwise if X then Y which contradicts ~Y.

    @GaneshSittampalam I joined this site just to upvote your comment.

     –  Mar 11 '15 at 19:45
  • @littleadv Ganesh and user 1512321 are right. I think you meant ~X doesn't imply ~Y. ~Y definitely does imply ~X. – reirab Mar 11 '15 at 19:50
  • 1
    @littleadv Very rarely tax preparers will quote a price upfront. Yet, they don't work for free. There has to be some kind of understanding of what is going to be charged, whether it be a fee schedule, an hourly rate, etc. No one in their right mind would sign a contract that says "I agree to pay you whatever amount you decide on later." – reirab Mar 11 '15 at 19:54
  • 1
    @reirab hmm.... have you seen an accountant's engagement letter recently? Or an attorney's? Yes, that's how it is. Sorry to disappoint you. There's a good reason for it too. The same form may take 10 minutes to fill, and may take 5 hours just to research about the case law. Depends on the circumstances. Obviously H&R Block employees don't do hours of research on case law, but the principle stands. – littleadv Mar 11 '15 at 20:00
  • This link has a number of explanations regarding the general pricing methods for tax preparation. I think what your answer is missing, is quotes and examples which better illustrate your point than the HR Block example. Note that one primary concern from the many is: No one in their right mind would sign a contract that says "I agree to pay you whatever amount you decide on later." In my link there seems to be a rule that they are "prohibited from charging "an unconscionable fee" for providing tax services." – DoubleDouble Mar 11 '15 at 20:44
  • @DoubleDouble that's a legal requirement. What's its relevance? Any tax preparer is prohibited by law from charging "an unconscionable fee", but that term itself is not very well defined. Regardless, it doesn't mean that they're not allowed to charge any fees at all, does it? – littleadv Mar 11 '15 at 20:47
  • I am in agreement with you - that legal requirement is what prevents the "pay you whatever" worry that others have. Your answer is correct, but in HR Block's case however, they have their "100% satisfaction guarantee". Ultimately, nothing is more important than your satisfaction. That's why we offer our 100% Satisfaction Guarantee. We're so certain you'll be satisfied with the tax preparation services at our offices, you only pay us if you accept your return. – DoubleDouble Mar 11 '15 at 21:03
  • @DoubleDouble that's very nice of them. I mentioned it in my answer, but the argument until now was not about this specific promise, but rather the terms and conditions. – littleadv Mar 11 '15 at 22:10