A filing error by H&R Block, Inc. (NYSE:HRB) and a few other tax filing companies, could cause a delay in over 600,000 tax refunds. Most of them are students who need immediate money to pay for educational expenses, and tax receipt to apply for grants.
People were expecting tax returns, and when the returns didn't show up, they used Where's My Refund feature of IRS to know the status. IRS said that the tax returns were still being processed. Later, IRS disclosed that the Form 8863 had been filed incorrectly for hundreds of thousands of people. Form 8863 is related to student tax credits.
Thousands of customers expressed their frustration and worry on H&R Block, Inc. (NYSE:HRB)'s Facebook page and blog. The tax filing company said that there were changes in the form. Earlier, people could leave five lines on the form for a "No" answer. But this year onward, they must enter an "N" on those lines or risk a delay. H&R Block Inc. (NYSE:HRB) said by the time it learned about the changes, it had already submitted hundreds of thousands of tax refunds.
The IRS said that it is aware of the situation, and is currently working with the affected software companies to help in processing of those returns. IRS assured that people who filed their tax returns between February 14 and February 22 will receive their refund within maximum 21 days. In an earlier letter, the IRS had said that the affected tax returns could be delayed by eight weeks.
The Form 8863 was filled in more than 6.6 million tax returns, but only 10 percent of them were affected, estimates MarketWatch. H&R Block, Inc. (NYSE:HRB) apologized to individual filers on its Facebook page and blog. Some of the people affected said that the tax filing company should have sent mass mail to people as soon as it became aware of the error.
H&R Block, Inc. (NYSE:HRB) is not the only company to make errors. Minnesota Department of Revenue warned taxpayers last week against using TurboTax when filing their state income taxes. Minnesota Department of Revenue noticed errors in 10,000 returns filed by TurboTax.