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In 1955, when brothers Henry and Richard Bloch advertised tax preparation services their company United Business Services offered as a courtesy to their business clients, they stumbled into a need. By offering tax preparation services they would more than triple their revenue in just a year, launch one of the most recognized brands in the country and birth an industry. If that weren\u2019t enough for these Kansas City entrepreneurs, their company, which would become H&R Block after that first tax season in 1955, has continued to spur innovations in tax, business and technology in its 63-year history.<\/p>\n
After their success providing tax preparation services in Kansas City, where the IRS had recently discontinued its free tax preparation services for taxpayers, H&R Block opened offices in New York, the next city scheduled to lose free tax preparation services from the IRS.<\/p>\n
With alternating two-week schedules, Henry and Richard shared responsibilities for the New York offices. However, both had families and neither wanted to relocate to New York, so they eventually decided to sell the operations there. Two CPAs wanted to buy the New York business, but could not meet the asking price. Instead, the CPAs agreed to pay the Blochs $10,000 along with royalties. The franchise model and the H&R Block franchise network<\/a> were born.<\/p>\n In the 1980s, H&R Block began using computers to complete tax returns. In 1980, the company acquired CompuServe, a move that helped H&R Block grow and keep its 8,676 offices connected.<\/p>\n David Platt<\/a>, who bought his H&R Block franchise in 1975, recalled that when H&R Block introduced computers to his tax office, he thought, \u201cIf they don\u2019t work, we\u2019ll just push them aside and do taxes the way we\u2019ve always done them.\u201d But today, Platt says, \u201cI wouldn\u2019t let them go.\u201d<\/p>\n Computers and his tax knowledge allow him to work \u201cwhat if\u201d scenarios with his clients and talk about the impact life changes have on their taxes.<\/p>\n \u201cIn the 70\u2019s when a client wanted to talk about what might happen in their life, we were completing entire forms for each scenario. Today, we can have endless conversations with clients about their possible life changes and tax impacts.\u201d<\/p>\n Because of this expertise and the capital investment to equip offices with computers, H&R Block could help the IRS test e-filing pilot programs<\/a> in Cincinnati and Phoenix.<\/p>\n The e-file pilot program required tax preparers to call an IRS office in Cincinnati. An IRS employee there would plug the phone into the Mitron, transfer the information from the Mitron to another machine known as a Zilog, which would convert the data into files the IRS system could read. Finally, the IRS would transmit the data back to the tax preparer through another phone call and connection to a modem in the tax preparer\u2019s office.<\/p>\n In the pilot year, the IRS processed 25,000 e-filed returns in this way. The IRS currently processes more than 100 million e-filed returns annually (no Mitron or Zilog needed).<\/p>\n \u201cOur early experiments with computers and e-filing did more than help the IRS build a more secure, faster way to process returns. We ultimately delivered a better tax preparation experience for our clients,\u201d said Platt.<\/p>\n By 2004, taxpayers had been going to H&R Block for almost half a century and using H&R Block tax software to do their own taxes for more than a decade. In 2004, H&R Block introduced a new tax preparation method combining the hands-on convenience and value of DIY tax prep with the confidence and accuracy that comes from review by an H&R Block tax professional. The new filing method, known as \u201cSignature,\u201d would become \u201cBest of Both\u201d in 2010 and \u201cH&R Block Tax Pro Review<\/a>\u201d in 2018.<\/p>\n \u201cOur ability to combine DIY tax prep and end-to-end reviews of returns by H&R Block tax experts has become so popular that some competitors are trying to replicate our process,\u201d said Kerri Jones, director of digital at H&R Block. \u201cHowever, we\u2019ve got more than 80,000 tax professionals and more than six decades of helping clients do their taxes their way that gives H&R Block clients an unfair advantage that we feel no other company can offer.\u201d<\/p>\n In 2017, H&R Block introduced IBM Watson to taxpayers filing their 2016 tax returns. The technology helped deliver the best outcome for each unique tax situation, and with a dedicated monitor for the client, made the in-office experience more engaging and transparent for clients who wanted to better understand their tax situation.<\/p>\n \u201cWe help taxpayers get their taxes done the way they want. For our clients who come in an office we have created an experience that allows them to be involved in the process and better understand their tax situation and make sure they\u2019re getting every credit and deduction,\u201d said Meg Sutton, director of client experience at H&R Block. \u201cH&R Block with Watson turns our 600 million data points and 60 years of tax expertise into a personalized tax preparation experience that is accessible and understandable \u2013 an experience you won\u2019t get anywhere else.\u201d<\/p>\n The collaboration between H&R Block and IBM was the first time Watson was applied to tax preparation, enabling millions of filers to benefit from the industry-leading expertise of H&R Block\u2019s tax professionals, who partner with Watson to improve the client experience and aid in identifying credits and deductions.<\/p>\n1986: Already using computers to complete tax returns, H&R Block helps the IRS test e-filing<\/strong><\/h2>\n
2004: H&R Block gives DIYers a way to get the \u201cbest of both\u201d methods of tax preparation<\/h2>\n
2017: H&R Block introduces augmented intelligence at the tax desk in IBM Watson<\/strong><\/h2>\n
2018: Virtual tax prep experience gives taxpayers tax office support without the office visit<\/strong><\/h2>\n