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Sunday, March 05, 2006

IF H&R BLOCK CAN'T GET GET IT RIGHT...

You don't have to be an accountant to know that doing tax returns and determining tax liabilities is complicated. But when tax preparer giant H&R Block can't figure out its own taxes, maybe things are getting too complicated.
In a recent article in USA Today, it was reported that H&R Block is restating earnings for fiscal years 2004 and 2005 and the first two quarters of fiscal 2006 because it understated its tax liability by $32 million. This is not the first time H&R Block has had to do this - last year it found it understated its tax liabilites by $129 million due to errors form an acquisition.
H&R Block is not the only big company that is correcting tax accounting mistakes. Last year 183 companies corrected tax errors, up form 87 in 2004, 80 in 2003 and 27 in 2002. It is likely that some, if not all, of the increase is due to increased corporate reporting compliance arising from Sarbanes-Oxley laws.
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