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TAXES: H&R Block blunder begs questions
Miami Herald via NewsEdge Corporation :

Call it a gift to late-night television comedians.

But marketing experts say a $32 million tax mistake by H&R Block could
drive away potential customers, and that would be no laughing matter
for the nation's largest tax preparer.

"For a firm like H&R Block, credibility is of paramount importance,"
said James McAlexander, an Oregon State University marketing professor
who has looked at how professional services providers appeal to
consumers. "If the H&R Block story becomes fodder for late night
television, where they become the butt of the joke, that could affect
their credibility with prospective clients."

Shares of Kansas City-based H&R Block fell $2.18, or almost 9 percent,
to close at $23.01 Friday on the New York Stock Exchange. The company
on Thursday reported a 68 percent drop in third-quarter profits, and
executives told analysts that they were lowering their earnings
expectations for the year.

The company also said it was restating earnings for 2005 and 2004 and
the first two quarters of this year after discovering it had made a
mistake in determining its state income tax rates.