Review of H&R Block Expat Service

Review of the H&R Block Expat Service – I DO NOT RECOMMEND THIS SERVICE.

We moved to the UK mid-calendar year (2015), and our tax situation was complex enough that we decided to request professional assistance.

We have used H&R Block in the US in the past and had good experiences, and we decided to use their Expat Service.

We sent in the online request for assistance on March 27th.  After exchanging emails with them (to ask questions about their service, sign the user agreement, etc.), we uploaded all of our financial documents to their secure portal on March 31st.  They sent an email on April 3rd with a few follow up questions, which we promptly answered.

We didn’t hear anything from them for a week, so we emailed the secretary/coordinator on April 11th, requesting an update.  We knew that we had a rather substantial tax liability due to [specific investment], and we did not want to miss the deadline and be subject to paying interest (we informed them of this concern).

The secretary forwarded our email three days later on April 14th to the tax preparer. The preparer emailed us back, stating that [specific investment] “is not going to have a tax implication until” [specific action is taken].  [Specific action] had not been taken, and likely wouldn’t be taken for many years, so we were seemingly in the clear.  We were surprised that we would not have a massive tax bill like we thought we would, but accepted this answer because we originally decided to work with a tax expert because we found the rules about this [specific investment] to be so complex.  And admittedly, it was nice to believe that we didn't have to pay a whopper of a bill.

We did not receive any other correspondence from them until April 25th; wherein they requested payment for their services.  After payment ($420 for the tax return and FBAR) was received, they provided us with a copy of our tax return and FBAR to review.  My partner noticed that the information about [specific investment] had not been included at all on the return on the required line.  It seemed odd to leave off that information completely, even if there were no further implications.

We researched it a bit more on our own and discovered that the tax preparer was flat out wrong about our tax liability.  Not only did information about [specific investment] need to be included on the tax return for that year but it also had a massive tax implication for that year!

We then had to educate our tax preparer about the tax implications of this relatively common form of investment!

We then went line by line through our tax return and checked it against previous returns and IRS tax guidance because we did not trust that our preparer knew what he was talking about.  No other mistakes were found.  After educating our tax preparer, he fixed the return and had a manager review it as well. 

Our return was electronically filed on May 2nd, which also meant that we had $27 in interest to pay as of that date as well.  No interest would have accrued if our tax liability had been paid by the April 15th deadline.

So, in conclusion, I assume that the tax preparer:

1) Thought he had all the time in the world until the June 15th deadline (from the automatic extension for citizens abroad), ignoring the fact that payment for a projected tax liability must be received by April 15th in order to avoid accruing interest,

2) Ignored our concerns - which we stated directly to him – about missing the April 15th deadline and being subject to interest.

3) Was ignorant about the tax laws regarding [specific investment]…which meant that he could not appreciate how quickly a five-figure tax liability would accrue interest.

I would say – use the H&R Block Expat Services at your own risk.  Thankfully, our tax situation will be less complex for 2016, and we plan on completing our return on our own.  We found that the stress and expense and lack of confidence in this service is not worth it.  YMMV. 

Thanks for posting about this, but sorry to hear about all the aggravation you have been put through.

The problem with big firms like H&R Block is that their service tends to be a bit generic and impersonal. I've heard stories like yours before. Perhaps try a smaller expat tax specialist firm such as Bright!Tax next time.

While I have never heard of Bright Tax here in the UK, most UK based individuals who do not feel confident handling their own tax returns will want to check that any proposed tax adviser is qualified with at least one professional accounting or tax professional body in the UK as well as in the United States so that they know that the adviser is adequately regulated in the UK and handles every day many of the complexities of the foreign aspects of the United States tax system.  Indeed, more broadly, for most UK based individuals there are often considerable advantages in having a UK based adviser who can jointly advise on both US and UK tax issues and (possibly) handle both sets of tax returns in the UK.

These include:
1.   The client and the adviser being located in the same time zone.
2.   Client documents and workpapers being held outside of the United States; which many people perceive as providing additional protection in the event of IRS audits.
3.   Advisers outside of the UK are unable to offer the protections to clients provided by the UKs Proceeds of Crime Act, which requires all tax professionals offering services in the UK to be regulated and supervised for anti-money laundering protection purposes.  Here in the UK it is a criminal offence to offer tax advice unless the adviser is supervised. Quite unlike within the UK, there is no requirement for mandatory regulation of tax advisers in most of the United States. 
4.   The fact that although there are roughly one million paid tax professionals within the United States, that there are naturally only very few amongst these who understand enough about the US reporting of foreign based taxpayers.
5.   Most tax advisers outside of the UK are not bound by the UK ethical standards that govern UK qualified advisers; which set out fundamental principles of integrity, objectivity, competence and care, confidentiality and behaviour (http://www.tax.org.uk/professional-standards/professional-rules/professional-conduct-relation-taxation).
6.   The opportunity in the unlikely event that things ever go wrong to get issues addressed through a supervisory body that is closer to the client than an adviser located several thousand miles away.