IRS tax Form 8863 Delays: Here’s $25 for Your Troubles, H&R Block Says

ecreditdaily.com writes: For H&R Block to say this has been a tax season “like no other” is a big understatement in the wake of the Form 8863 transmission snafu that triggered refund delays for an estimated 600,000 clients.  Last month, H&R Block CEO Bill Cobb issued an apology, saying “we made a mistake when the tax return was sent to the IRS.”

On Thursday, H&R Block, the nation’s largest tax preparer, said it is confident that 90 percent of affected clients have received their tax refund or at least a notice of a refund date.

And, by the way, here’s a “$25 Emerald Card gift card to account for any processing delay and express thanks.” Emerald is the company’s signature debit card, which is also used for taxpayer refunds.

That is much less than what most angry H&R Block clients are demanding. Most want their tax filing fees refunded. And there has been at least three lawsuits filed by clients seeking much more in compensation for losses.

And angry clients still waiting for refunds — whether tied to the Form 8863 issue or not — continue to vent their frustrations on H&R Block’s Facebook page.

In mid-March, the IRS had estimated that the delays would take 4 to 6 weeks. That time seems to have been cut down somewhat, although no specific data is available.

Many affected by the transmission problems with Form 8863, which provides valuable tax credits based on tuition and other college expenses, are students that were waiting on refunds to pay tuition or other costs for another year. And many were waiting for returns to be processed to complete the required financial aid forms as college application deadlines loomed.

The IRS had this to say this week regarding the Form 8863 delays:

The IRS worked quickly to process tax returns affected by a problem with a limited number of software company products involving some taxpayers filing Form 8863, Education Credits. As a result, the IRS was able to issue refunds to virtually all affected taxpayers by mid-April, with many receiving their refunds even sooner. There may be a small group of these returns that may have other issues that continue to be worked.

Here’s the most recent statement from H&R Block:

This past tax season has been like no other in recent memory. The late passage of additional tax legislation and subsequent delay in the issuing of all tax forms pushed the beginning of the e-filing season back almost two weeks to the end of January. This alone caused a refund delay for close to 18 million taxpayers who usually file in January and receive a refund by early to mid-February.

The IRS has reported it has cleared nearly all returns impacted by the 8863 processing delay. We are confident more than 90 percent of our clients impacted by the form delay have either received their tax refund or received notice of a possible refund date. For those who are experiencing a longer delay, it is possible the IRS has identified additional issues with the return.

H&R Block appreciates that the issue involving the filing of Form 8863 this past tax season may have frustrated and inconvenienced impacted clients. H&R Block recently sent those clients who had their tax returns prepared and filed in company-owned locations its sincerest apologies and a $25 Emerald Card gift card to account for any processing delay and express thanks for their patience in this matter.

These clients can rest assured their tax professional prepared their tax return accurately and the tax refund was never in jeopardy due to this issue. The problem was a system disconnect in processing the form that unfortunately further delayed the return. This delay was not caused by something the tax professional did – or did not do.

Once the company became aware of the issue, it worked diligently on the clients’ behalf with the IRS to expedite the processing of those returns. By working with the IRS, most clients ultimately received their refund more quickly than originally expected.

H&R Block serves approximately 15 million clients in its offices and strives to provide consistent quality client service. Nevertheless, we will not stop working to improve that experience for all of our clients.