Boom Time at Block

For taxpayers who still strive to fill out their Form 1040s accurately and completely, the task has become ever more arduous and exasperating. Congress loaded last year's tax bill with new deduction rules, depreciation formulas and tax-shelter gimmicks and thus added to the confusion that has already made the Internal Revenue Code scarcely more comprehensible than a textbook on quantum mechanics.

The more bewildered taxpayers become, however, the bigger the bonanza for H&R Block, the titan of the American tax-preparation business. When the stampede of last-minute customers subsides after April 15, the Kansas City-based firm expects to have completed 10 million 1981 tax returns, or roughly one out of every ten filed, for an average fee of about $32. With 8,190 offices in the U.S., and 1,160 overseas outlets in twelve foreign countries used by Americans living abroad, Block reaped revenues last year of $288 million, up 25% from 1980.

The typical Block customer rushes into one of the company's small storefront offices, usually without an appointment, during the first few days of April. Most often the client is a man in his late 30s with an income ranging from $ 12,000 to $35,000. He may have prepared his forms in the past, but he has gone through a divorce, got a new job or had some other experience that altered his tax status. Though not out to cheat the IRS, he wants to know all the legal loopholes. Says Henry Bloch, the company's president: "Our customers believe in paying their fair tax, but they don't want to overpay."

Bloch and his brother Richard launched H&R Block in 1955 by running two $100 ads in a Kansas City newspaper, offering to fill out tax forms for all comers. They spelled the name with a k instead of an h so that people would not incorrectly pronounce it "blotch." In the 1970s, the firm's growth surged when Henry became familiar to Americans as the grandfatherly figure who patiently recited "17 reasons why H&R Block should prepare your taxes," through a seemingly endless series of television commercials.

Now that the company has an office in almost every U.S. city with a population of more than 5,000, Bloch fears that the growth of his tax business may soon peak. As a result, he is moving H&R Block into several new fields. Block's Personnel Pool of America, with some 300 branches nationwide, provides nurses for temporary hospital and home medical care. The company's CompuServe division supplies a variety of computer-based services, including an electronic mail system for businesses. Through a new subsidiary, Block provides management services to a chain of 65 storefront legal clinics that was started two years ago by Cleveland Attorney Joel Hyatt.

With all these new ventures well under way, Bloch is not overly concerned about an effort going on at the IRS to redesign completely Form 1040 and make it much simpler. Though a more fathomable tax form might cost Bloch customers, he readily admits that Americans should learn how to prepare their returns. Says he: "There's nothing like getting into your own tax return for teaching you where your money is going." Following that advice, Bloch was tackling his own tax return last week.

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