H&R BLOCK TO PAY $62M TO SETTLE REFUND SUITS: Tax preparation giant H&R Block Inc. will pay $62.5 million to settle class-action lawsuits over its use of refund anticipation loans. Block said that the settlement would cover more than 8 million customers who received the loans between 1989 and 2005. The company has already set aside money for the potential settlement and announced that it plans to take a third-quarter charge of $31 million to cover the remainder of the settlement.The lawsuits said that RALs took advantage of financially unsophisticated taxpayers who were not adequately informed about high interest rates. Besides the cash settlement, Block agreed that it would better advise customers in the future about other options in filing taxes and gaining refunds quickly, as well as any interest charges or other fees they would have to pay. A federal judge in West Virginia was scheduled to review the settlement. If approved, the deal will resolve four class-action suits filed in West Virginia, Ohio, Alabama and Maryland, along with claims pending in 22 other states and Washington, D.C. Block still faces two other lawsuits tied to the loans.
CORPORATE TAXPAYERS NOT YET PREPARING TO E-FILE: Many large and midsized companies, which are required by the Internal Revenue Service to file their 2005 taxes electronically, have not begun preparing for the change, according to a recent poll conducted by Big Four firm KPMG.
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