By Steve Kelman

Blog archive

A media double standard?

tax form and keyboard

Like other procrastinating Americans, I have been working the last few days trying to finish up my taxes. (Although unlike many Americans, I tend to be in the "taxes are the price we pay for civilization" camp.) I use H&R Block software to do my taxes, and as I was checking the 1040 that emerged from my efforts to answer the various questions the software prompts, I noticed something strange.

I own a number of stocks in foreign companies, where the government of the country deducts local income taxes on the company's stock dividends. In such cases, U.S. tax law allows taxpayers to take a tax credit corresponding to the taxes deducted by the foreign government. So, for example, if the foreign government deducts $100 in taxes, the taxpayer can take a $100 credit on his or her own taxes. (The taxpayer reports the dividend payment as income and pays U.S. taxes on it.)

The foreign tax credits are entered in the H&R Block interview system where you give the various items on 1099 forms for dividend payments. I dutifully entered these where relevant, on the line labeled "foreign tax paid."

However, at the end of the process I discovered to my surprise that the H&R Block system hadn't transferred these credits from the interview form to line 47 on the 1040, which shows foreign taxes paid, so they can be credited. My 1040 showed foreign tax credits of zero dollars.

So I called the company's customer service. To make a long story short – and this was a very long story, as I was on the phone probably for 45 minutes about this one problem, and I felt like I was educating the customer service representative on U.S. tax law as I was going along – there was a problem with the H&R Block software. They said they would share my problem with their tech team, but it would likely not be fixed for several weeks (well after April 15). I could bring in their live tax-filing helpers, but that service cost money. Also, they told me that if I changed any of the forms myself from what came out of the interview process, I wouldn't be able to e-file.

I have written before about problems that exist in the private sector as well as government but often get more attention when they are created by government. Frankly, I think a lot of people notice them more when they occur in the context of a government experience, because they correspond to the preconceptions most people have of what service from government vs. the private sector is like. Once that perception gets established, it gets confirmed by selective attention.

And that perception in turn is influenced by media coverage. This is another example of a problem that, had it occurred in government, would get covered by the media.

To be fair to H&R Block, there was one difference: the customer service rep told me that next year I could provide my call reference number, and H&R Block would provide me with next year's tax prep package for free.

Posted on Apr 11, 2013 at 12:09 PM


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