I am hoping someone will respond to this. I really need some advice before tomorrow.

I took my taxes to H&R just before tax season, it was a new guy doing taxes (seasonal employee), and admittedly, my tax form was slightly in-depth: about 4 W2s, a 1099, and deductibles for both.

Anyway, the guy apparently made a total mess of my return, placing 1099 expenses with W2s, and vice-versa, and didn't include all deductibles (all my W2s 1099 were included). I ended up owing about $1,000 to the IRS (better than I expected), and bought the "Peace of Mind" insurance.

A few weeks later, I get a letter from the IRS. Nothing big, but I forgot to sign something. The H&R I took it took was seasonal and closed, so I took it to a year-round district office.

I went in there simply to sign as a witness on a form that I had to sign so I could verify my 2006 claim. For whatever reason, the guy wasn't interested in signing, and started going through all my tax info. and scrutinizing EVERYTHING, asking me to justify things (I hadn't brought in any of my tax info. and was completely unprepared), and he was telling me I owed $3,000-4,000 extra now. I made him sign my original form and left.

I called back the manager and complained. She told me "peace of mind" would cover up to $5K, it's their fault, so don't worry about it. This was in early May.

Today (June 28), they call me back, telling me my "peace of mind" is invalidated as that guy found the mistakes before the IRS (bear in mind this was 3 weeks later, and I never asked him to go through my info.), so I owe all this money, and need to come down to their office as they need to completely redo my taxes.

I go down there (no papers, no intent to sign anything), and complain, telling them it's not my fault the original guy screwed up my taxes so bad, I never asked for the other guy to do a complete interrogation of my 2006 tax info. and the manager said "peace of mind" would cover everything a month and a half ago.

The lady said she agreed that I don't need to pay, they'd stick to what the manager said last time, and would consider it as MY finding on all the discrepancies. But she still wants me to bring my taxes in as soon as possible to fix everything. No charge. And would even increase my state return pay, and put more money in my social security.

The IRS has contacted me on none of this, other than my payments. Should I get more info first before going in there, or should I take it in tomorrow, and demand in writing that I'm not going to have to pay, and they stick to upholding the"peace of mind" as they claimed?

I just find it weird that guy decided to scrutinize my 2006 return when I was unprepared and never brought it up to do so, and why it's taken so long for them to get back to me after that, and now they're starting to waver on the whole "pay" issue.

According to their rules, they found it, so I have to pay, but they're willing to overlook it, and stick to what their manager originally said. As far as I'm concerned, the original guy should have been better prepared or qualified, and I don't know why they're so eager to jump on this without IRS intervention, especially if they're still going to pay.

How do I handle this? I could really use any insight.

Ps. Is the previous verbal agreement enough until they get it done, or should I get this in writing as soon as possible?

If it were me, I would go an independent tax accountant or CPA and have him re-do the return from scratch, even if you have to pay to get it done. That way, you would have something to compare the "final product" that H&R Block will supposed provide you under the "Peace of Mind" warranty.

Otherwise, you would have to depend SOLELY on their expertise, which, as your experience shows, may NOT be the best decision.

The simple outcome is this: they did it incorrectly -- they should fix it for free. They should not charge you for fixing it, and you are in your rights to ask for them to cover the cost of any penalties and interests.

BUT, they should not be required to pay the tax owed (only the penalties and interest). The tax was yours to pay and there has just been a delay in you paying it.

I agree with TTE.

The TAX is your responsibility; everything else is on H&R Block's plate.