AICPA and H&R Block Feud Over Ad Campaign

The American Institute of CPAs is crying foul over an ad by H&R Block suggesting that many CPAs don’t know how to prepare tax returns, but Block is promising to increase its competition with CPAs.

The radio spot and video for the Block Advisors service said its advisors have an average of 15 years of experience. “Speaking of expertise, did you know many CPAs don’t even specialize in preparing tax returns? Think about that,” said the video, which was reported on by the Going Concern blog. "You may want to ask your CPA’s office a few questions. Who actually prepares your return? Can you sit with them or drop your taxes off as you like? What’s with all this paperwork to fill out every year, and most importantly, will they be able to stand behind the work if the IRS comes knocking? At Block Advisors, we’ve got you covered.”

In the AICPA’s CPA Letter Daily newsletter on Wednesday, the AICPA noted that it has responded to H&R Block and distributed a model letter that state CPA society CEOs and other CPAs can use to register their displeasure with Block. The letter is addressed to H&R Block president and CEO William Cobb and claims the ads grossly misrepresent CPA tax practitioners.

“They are misleading and question our competency, practice standards and ability to represent clients before the IRS,” said the AICPA. “The claims are not only unacceptable, they are inaccurate. Many of your valued customers have benefited from the expert, objective guidance of CPAs who are employees of H&R Block. Taxpayers are putting their trust in them and your brand to file their taxes responsibly and accurately. To disparage the reputation of CPAs undermines their professional service and the credibility of H&R Block.”

The letter asks Block to discontinue the ads this tax season. The AICPA said it would continue to monitor the situation.

On Thursday, Cobb sent a sarcastic response to AICPA president and CEO Barry Melancon. “First, I’m heartened that CPAs acknowledge H&R Block has a place in the tax preparation category,” he wrote. “That’s an interesting admission, considering the Bloch brothers essentially invented it 61 years ago.  Just so you have a more complete understanding of what we’re doing, we launched Block Advisors early this year with almost 300 locations nationwide. This is a new and separate brand, designed to provide services that our clients have told us they need and want—in a nutshell, an alternative to their CPAs.  Block Advisors features some of our most experienced tax pros and serves clients who need tax planning throughout the year—those with more complex tax situations or small business owners.”

Cobb refused to take down the video. “But to the larger point of your letter, the issue AICPA has raised is really about healthy competition and giving taxpayers a choice,” he said. “Our promotional video at www.youtube.com/watch?v=AJcBK1DCrbo does an excellent job of explaining Block Advisors and I have no intention of pulling it down. Further, our overall marketing campaign is telling taxpayers they now have a great new alternative, one that can serve clients with the most complex tax situations, and do it at very competitive prices. That message is striking a chord and I’m confident about the future of Block Advisors.”

Block is not only refusing to take down the video, but it is even going to spend more money to promote it more widely.  “I’m so confident that just today I have directed my marketing team to increase the media buy for Block Advisors,” said Cobb. “Soon we’ll be airing in additional markets, telling exponentially more taxpayers about Block Advisors. And we’ll be doing it with a special offer:  Anyone who comes to Block Advisors by March 31st will get half off what they paid a CPA or anyone else to do their taxes last year.”

As a final riposte, Cobb said his new service would provide more competition. “Competitive services at competitive prices—that’s giving taxpayers additional choices,” he wrote. “That’s what this is all about, and it’s the right thing to do for taxpayers. Thank you again for your letter, Barry.”

The AICPA declined to comment on Cobb's letter.