Judge denies Block RAL settlement
An Illinois district judge denied approval of a settlement that would have ended litigation against tax prep giant H&R Block related to refund anticipation loans, the company disclosed.
In a May 27 filing with the Securities and Exchange Commission, the company said that a U.S. district judge for the Northern District of Illinois denied a motion for preliminary approval of the proposed settlement, terminating the agreement.
"The parties to the litigation will be returned to their status immediately prior to the execution of the Carnegie Settlement Agreement as if the agreement had never been made," the company said. The proposed agreement, reached earlier in May, would have settled a 1998 Chicago class-action lawsuit related to refund anticipation loans, ending all RAL-related class-action litigation against Block.
The proposed settlement would've covered all RALs funded by various lenders through H&R Block, as well as many RALs funded by Beneficial National Bank, Household Bank f.s.b., and various lenders with which HSBC Taxpayer Financial Services had agreements through other tax preparers from 1987 through the end of the 2005 tax season. The settlement class included more than 28 million consumers and covered more than 55 million individual RAL transactions.
The proposed settlement had provided for $110 million in cash and $250 million in H&R Block tax preparation coupons to be distributed to all class members.
IRS to close 68 taxpayer centers
As part of cost-cutting measures, the Internal Revenue Service is forging ahead with plans to close some of its Taxpayer Assistance Centers, which provide walk-in service for taxpayers on tax law, tax return preparation and account inquiry resolution via face-to-face meetings with IRS employees. The IRS, which currently operates 400 Taxpayer Assistance Centers, will close 68 of those locations this fall.
IRS Commissioner Mark W. Everson had disclosed the agency's service cut plans in April during a Senate Appropriations Subcommittee hearing on the 2006 IRS budget.
Out of 2,300 employees who operate the TACs nationwide, the agency said that fewer than 450 employees are located in the affected centers. Qualifying employees may be offered early-out retirements and buyouts, as the IRS budget allows. Most employees should be entitled to priority placement for other jobs within the IRS and other Treasury bureaus.
The IRS said that closures reflect the fact that more taxpayers are using its Web site and e-filing their returns, while the use of services with face-to-face interactions has declined.
Ebbers' sentencing postponed
The sentencing of former WorldCom Inc. chief executive Bernard J. Ebbers has reportedly been rescheduled to allow for more time for arguments on his bid for a new trial.
Ebbers, who was found guilty in March on charges of conspiracy, securities fraud and making false filings with the Securities and Exchange Commission in connection with the $11 billion accounting fraud at the telecommunications company, was originally scheduled to be sentenced on June 13, but a federal judge has postponed the sentencing to July 13, according to published reports.
Ebbers faces up to 85 years in prison. He will have until June 10 to respond to a motion by the U.S. Attorney's Office opposing his request for a new trial. His lawyers also must submit any motions related to his sentencing by that date.
Ebbers asked U.S. District Judge Barbara Jones to grant him a new trial, saying he was denied a fair trial because the court declined to grant immunity to three former WorldCom executives who Ebbers' lawyers said would have exculpated him, according to reports.
WorldCom, which filed for bankruptcy in July 2002, a month after the fraud was uncovered, re-emerged as MCI.
