by Seth Fineberg
New York - The American Institute of CPAs and many of its members said that they were appalled by H&R Block's recent tax preparation commercials -- which they felt portrayed CPAs in a dubious light -- and are urging the company to pull the ad campaign.
On Jan. 31, AICPA president Barry Melancon sent a stinging letter to Block chief executive Mark Ernst, saying he found the ad "disparaging to the CPA profession and to tens of thousands of our members."
The institute also sent a letter to its membership, encouraging them to express their views directly to Ernst and to send copies of their letters to state consumer protection agencies and the Better Business Bureau.
One of the controversial spots depicts a seemingly confused taxpayer, searching for a tax preparer while walking down dark streets filled with neon CPA signs. He eventually arrives at the bright H&R Block offices. Many CPAs called and e-mailed the AICPA, with some stating that the ads made CPAs seem "daunting," "threatening" and "unsavory."
In another spot, H&R Block urges customers to bring in tax forms from previous years, and if Block preparers find mistakes a CPA missed, they will redo the forms. This ad also features individuals who have had taxes prepared by a CPA firm and brought them to H&R Block, which discovered errors.
Ernst is currently reviewing Melancon’s letter and plans to respond in the near future, according to Block spokesman Bob Schneider, who did not see any problem with the ads.
"Our ads promote the benefit of H&R Block and don’t single out CPAs in any way," he said. "We have no problem with CPAs and their profession, and we will continue to run the ads, which we feel have been generally well received."
Schneider in particular noted that the ad promoting a Block service to find errors on old tax forms featured actual client testimony, and was "not meant to be an attack on all CPAs."
Many CPAs felt differently, however.
Numerous online message board threads from CPAs described the ads as "misleading" and even "trying to capitalize on the negative fallout from Enron." One CPA in particular noted "these [recent Block] ads set us in reverse. They don’t need to advertise at our expense, or to confuse the public."
Some also questioned why H&R Block would run ads disparaging CPAs when the company has a financial stake in a CPA firm -- RSM McGladrey Inc. RSM was established as an indirect, wholly owned subsidiary of the H&R Block organization when the CPA firm McGladrey & Pullen, LLP sold its non-attest assets and business to Block. For regulatory reasons, McGladrey & Pullen was maintained as a separate entity in the business of public accounting, including providing audit and attest services, and certain income tax services.
"This is really between H&R Block and the AICPA," said a spokesperson for RSM.
There is currently no known legal action against H&R Block or Campbell Mithun (Block’s ad agency of record) over the ads. Campbell Mithun deferred their comments to Block.
But CPA disagreement over H&R Block ads is not a new issue. In fact, a good percentage of CPAs found Block’s TV ads over the past several years to be inappropriate.
Last year, the AICPA also wrote to Ernst, stating that its members felt misrepresented in the company’s ads. Though Ernst did not personally respond, the company’s general counsel wrote back and agreed to have minor changes made to the ad, which included the removal of an unflattering image.
"This year there was an intensity of calls and e-mails from our members that we could not ignore and felt it was time to point out to Mr. Ernst that our folks have expressed serious concern," said Geoff Pickard, the AICPA’s vice president of communications and public relations. "Our members don’t feel there is anything wrong with competition, but there are thousands of CPAs in the tax preparation business who feel they are being misrepresented."
