H&R Block reports total retail clients up 1.6 percent in 2008 tax season

KANSAS CITY, Mo. -- H&R Block Inc., the nation's largest tax preparer, said Monday the number of clients for its core retail business increased 1.6 percent in the Nov. 1 through March 31 tax-season period.

The increase over the year-ago period is based on figures adjusted to account for the extra day this year from the leap year and to remove people who were filing tax forms only to receive rebate checks from the government.

Anyone seeking a rebate check as part of an economic stimulus package must file a return, so some lower-income people who generally would not file returns are doing so this year.

The Kansas City-based company said that without adjusting for those factors, the total number of retail tax filers increased 4.2 percent.

For the last two weeks of March, core retail traffic was up 4.8 percent over the same period last year, the company said. With the economic-stimulus clients included, retail traffic was up 10.5 percent for that period.

The company said it made $251.4 million in preparation fees in late March, an increase of 5.2 percent over last year, and $2.05 billion for the season so far, up 8.5 percent from a year ago.

The net average retail fee fell 4.8 percent in late March, but it would have been 0.7 percent lower without the tax rebate filers. The company said the decrease was due to rebate filers and the typical influx of late-season filers with less complicated returns, which generate lower fees.

For the tax-season year so far, average retail fees have increased 4.3 percent and would have been about 5.4 percent without the one-time filers.

H&R Block reported that the number of clients using its TaxCut software or online tax filing products surged 31 percent in the second half of March, cutting the tax season year-to-date decline of those types of clients to 3.2 percent. The company said software sales have been down so far this year, while online users have remained steady.

H&R Block shares were down 45 cents, or 2.2 percent, to close at $20.43 Monday. They have traded in a 52-week range of $16.89 to 24.02.

The company said it plans to release its final tax season results on May 12.