H&R Sucks

rsiru · Apr 18, 2006, 11:22 AM

Dear AtlantaTaxExpert,

I really appreciate your help on this forum.

Here is my situation

Aug’ 02 - Oct’ 04 F1
Oct’ 04 – Oct’ 05 F1 OPT
Oct’ 05 – Present H1B

I have filed my taxes with H&R block and they filed my return under dual-status and did not take the standard deduction (under US-India tax treaty). They charged me $300+. When my friend suggested your website I browsed through the threads and found out that I don’t fall under dual-status. Then I went to H&R block and explained my situation. They did not agree with me and asked me to contact IRS. I did so and even the IRS said that I don’t fall under dual-status.

Then I again contacted H&R. This time they were rude and also said that IRS was wrong. I don’t know what to do. If I don’t fall under dual-status how can I prove them? Can I still claim standard deduction of $5000 under US-India tax treaty even when I’m on H1B by the end of the year? Any help is highly appreciated. Thank you again for your service.

taxsearcher · Apr 21, 2006, 12:27 AM

So did HR Block end up backing down and changing their position? They are clearly wrong in suggesting that you are a dual status alien. You should be filing NR and I hope they have accepted that position.

taxsearcher · Apr 21, 2006, 12:35 AM

Regarding your standard deduction, I believe that you should be allowed this deduction with respect to the income earned during the period in which you were a qualifying student. I think this because of the following comment from the technical explanation of the treaty. It suggests to me that the US can apply the usual US rules BUT ONLY TO THE INCOME IN THE PERIOD AFTER YOU CEASE BEING A STUDENT. Thus, for the period prior to this, the IRS must follow the treaty and that permits the standard deduction (I think the IRS rep was wrong because they are attempting to apply the regular law to the ENTIRE period, not just the period after which you ceased to be a student):

If a student who is resident in a Contracting State remains in the other State for a period
of time exceeding the period during which he is present principally for the purpose of his
education or training, the Contracting State which he is visiting may tax the individual under its
national law, but only for the period after the purpose of the student's visit has changed.

rsiru · Apr 21, 2006, 11:33 AM

ATE and Taxsearcher,

Thanks for your help and info I really appreciate that. Yes H&R changed their stand from "dual-status" to
"end of year H1". They even convinced the rep from IRS that I'm wrong. The H&R manager was rude and intimidating at times. I'm thinking of suing H&R. What is your opinion on this?

taxsearcher · Apr 21, 2006, 02:24 PM

This is what I would do:

1. Put together a document outlining why you believe the current assessment is correct. I don't mean your opinion as such but an opinion supported by evidence (i.e. the tax law that backs up your position).

2. As a part of this, document clearly why the HR Block advice/position was clearly in error. Again, back this up with sources of authority.

3. Request a meeting with someone higher up in HR. Either send the document to them or go over it in person (or both). You're going to have to be well versed in your stuff to do this.

4. Have something that you want them to do. For example, you want a full refund of their fees and some additional compensation for your cost of resolving their errors.

It is very obvious to me that they have made some blatant errors and you should not just back down and give up. Don't be put off by their rep having been rude but rather take it higher up. If you can show the higher up person that not only were the HR people wrong but they were rude, then you've got a pretty good case.

I'm happy to help if you need some assistance. If you want to PM me I will send you my email.

taxsearcher · Apr 30, 2006, 03:46 PM

Did you have any luck getting HR to respond positively?



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