Filing snafu delays 600,000 tax refunds

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KANSAS CITY, Mo., March 14 (UPI) -- An estimated 600,000 U.S. tax filers may have to wait six weeks to get tax refunds because of a company filing error, the Internal Revenue Service said.

The problem evidently involved the addition of new fields to Form 8863. H&R Block, the tax-preparation giant based in Kansas City, Mo., said its preparers filled out the forms correctly but the responses were not read properly by IRS e-filing programs.

The blunder affects about 10 percent of filers -- mainly students -- who filed Form 8863 for education credits Feb. 14-22, the IRS said.

Similar errors affected customers who went to other tax preparers, but H&R Block, based in Kansas City, Mo., is taking most of the heat, The Kansas City Star reported.

"The IRS is continuing to review the situation and working with affected software companies to assist in the processing of these tax returns," the IRS said in a statement.

H&R Block -- started by brothers Henry W. Bloch and Richard Bloch in 1955 and now with 11,000 domestic tax-preparing offices and 1,700 abroad -- began emailing, phoning and sending letters to affected customers Thursday. It also put information about the problem on its website.

Until announcing the outreach Wednesday, the company only provided messages on its Facebook page and information at its offices, even though many nervous customers received IRS letters warning them of the error.

The Facebook messages, which began a week ago, have received nearly 8,000 comments, most of them highly critical of the firm's handling of the issue. Many demanded their filing fees be reimbursed and pledged never to use the tax preparer's services again.

"Thank you for over 18 years of service, but this will be our last tax year together," one woman wrote.

Another woman wrote H&R Block should acknowledge it "messed up" and says it "will refund your fees because of the horrific hardship this has caused you and your family!"

H&R Block spokesman Gene King said Thursday some company clients affected by the filing error have already received refunds.