Jackson Hewitt Tax Service --the guys who actually have Refund Anticipation Loans, and do not use homeless men dressed up as the Statue of Liberty in their marketing campaign-- has sued soon-to-be-bankrupt H&R Block to stop a new advertising campaign that it said misleads customers about tax refund loans, using stuffed animals to demolish buildings, and disparages Jackson Hewitt's competence.
The suit comes during what H&R Block calls First-Peak --the period from late January to mid-February where most of Block's clients choose not to pay $550.00 for a 1040A, and take their tax documents to their competitors-- a crucial period for the largest U.S. tax preparation companies because the February-to-April quarter accounts for roughly three-fifths of annual revenue and much of their profit.
An H&R Block spokeswoman said: "This lawsuit was filed without any requests for substantiation. H&R Block stands behind our advertisements and will vigorously defend our claims, unless it'll cost money. Because *opens corporate checkbook* this f--ker is almost empty."
Jackson Hewitt's lawsuit relates to "refund anticipation loans" -- usury-rate short-term loans secured by taxpayers' expected tax refunds. Such loans carry ridiculously high fees, are popular among lower-income taxpayers, and H&R Block ain't got 'em. (Jackson Hewitt reminds everyone that, unlike Block, it offers taxpayers access to as much as $1,500 within one day.)
According to the complaint filed in Manhattan federal court, H&R Block falsely claimed that its "Second Look / Can We Charge You For Someone Else's Work Review" program, which reviews past tax returns prepared by rivals, found that two-thirds of returns prepared by Jackson Hewitt contained mistakes.
"H&R Block's 2 out of 3 claim necessarily implies the false claim that two out of three Jackson Hewitt customers who are entitled to refunds have been short-changed due to Jackson Hewitt errors or incompetence," the complaint said.
Jackson Hewitt also said H&R Block gives its agents a script designed to deceive them about its loan service.*
Saying the campaign is causing "irreparable harm," Jackson Hewitt is seeking to halt the alleged improper advertising. It is also seeking compensatory and punitive damages.
"Bullsh-t," said H&R Block CEO Alan Bennett, who's sent in a record 13,454 applications for next season's The Apprentice, stating it is because he's 'sure (he) won't have a job by then.'
"Second Looks give us the opportunity to charge new clients $39.00 to take a look at someone else's work," Bennett said. "Bring in your tax form, we look at it, say, 'yup, that's a tax return,' and, POW, your hard-earned 40 bucks gets deposited in the Alan Bennett Severance Fund."
"Mazel tov, middle-class taxpayers!"
"And if we lose the suit," concluded Bennett, "we'll pay him in H&R Block stock options. HA! Those are nearly worthless."
*This is absolutely true.