Tax prep giant H&R Block Inc. announced that its first-quarter tax preparation and related fees rose 3.7 percent from a year earlier, to a total of $1.98 billion.

The Kansas City, Mo.-based company also said that it had seen a late March surge, serving 5.4 percent more clients, and 3.4 percent more retail clients, in the last half of the month than a year earlier. Block said that retail tax preparation fees also rose 10.6 percent in the same period, to $251.3 million.

The interim tax season results are positives for the company, which has endured recent negative publicity in the form of a lawsuit from New York Attorney General Eliot Spitzer, a public omission of its own tax gaffe -- which cost the company $32 million -- and technology problems early in the filing season that sent clients into the arms of Block's competitors.

Block generates more than half its annual revenue during U.S. tax filing season.

For the entire first quarter, the average fee per client rose 6.5 percent, to $156.18. Total clients served by H&R Block's retail and online operations, including TaxCut software, rose 0.8 percent, to 15.8 million.

H&R Block plans to release preliminary full U.S. tax season results on May 10. Mark Ernst, the company's chairman and chief executive, said in a statement that while last year's figures included an Easter holiday, "The gain exceeded our expectations."

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