Overview: H&R Block is the world's leading tax preparation company. After World War II, brothers Henry and Richard Bloch founded an accounting and small business services company in Kansas City, MO. In 1955, they made tax preparation their sole business and gave their firm its current name (which has the phonetic spelling of their surname). Until that time, the IRS actually filled out tax returns at no charge at their local offices.

H&R Block's principal lines of business are:

• Tax preparation services
• Online banking services

H&R Block's financial advisory business has been sold to Ameriprise Financial.

Job Openings: See this current list of job openings.

Size: H&R Block reports these figures for the fiscal year ending April 30, 2008:

• Total U.S. tax offices = 13,038
• Franchised U.S. tax offices = 4,725
• Locations in Canada, the U.K. and Australia = 1,509
• Taxpayers served = 23.5 million
• Full-time employees = 9,700
• Total employees (including seasonal) = 137,200

H&R Block has 1,478 company-owned and 913 franchised "shared locations," mainly in Wal-Mart and Sears stores and pursuant to national agreements with those retailers.

Positives: As the leader in its field, H&R Block is an attractive alternative for learning the business of tax preparation. The franchising opportunities offered by H&R Block can give people with an interest in entrepreneurial careers a reduced-risk introduction to running their own businesses.

Negatives: H&R Block is a mass-market service supplier, with limited appeal to potential clients from the higher income brackets.

Tax preparation offices have a short make-or-break season each year, a major challenge both for offices managers employed by H&R Block and for franchisees. Finding, hiring and training qualified seasonal help is a major ongoing managerial challenge.

IRS Oversight: The Internal Revenue Service (IRS) has announced that it will impose professional standards on paid tax preparers starting in 2011. These standards will include passing a competency exam, meeting continuing education requirements of at least 15 hours per year, registering with the IRS, and paying an annual registration fee.

Since the testing, education and registration requirements apply to the paid preparer who signs a client's tax return, there is a potential loophole. It may be possible for an unregistered employee to prepare a tax return, and then a registered supervisor could review and sign it. However, preliminary indications are that the major tax preparation chains may want all their prepares registered, to limit liability and as a selling point to clients.

However, CPA holders will be exempt from these requirements, given the professional standards to which they already are subject.

Free 1040EZ Promotion: H&R Block has joined the ranks of firms that see merit in selectively giving away free services in expectations of landing new clients and generating incremental revenues. In 2010, it filed 6.1% fewer returns than in 2009. In 2011 H&R Block began filing the federal form 1040EZ for free, anticipating that the vast majority of those brought in by the promotion will either:

• Be ineligible to file a 1040EZ, and wind up paying to file a 1040.
• Have to pay to file a state income tax return in addition to the free 1040EZ.
• Become regular customers whose income will have grown within 2 years to the point of requiring a 1040, rather than a 1040EZ.

Source: "At H&R Block, 1040EZ Is Free," Bloomberg Businessweek, 1/24/2011. The article is a short case study in strategic thinking aimed at long-term revenue growth.