Approximately 660,000 U.S. taxpayers who filed returns through preparation companies including H&R Block have had their refunds delayed due to a software error that might have been prevented with more careful source code analysis. Following the incident, H&R Block is the target of two class action lawsuits, MarketWatch reported.
The error affects people who filed returns claiming educational credits with Form 8863. While preparers could previously leave certain boxes unchecked to indicate a "no" response, the Internal Revenue Service changed its policy to require these boxes to be filled with an "N." H&R Block failed to update its software to reflect this change until February 22, delaying refunds by up to six weeks. The IRS announced on March 26 that the delay would be reduced to two to four weeks. Nonetheless, H&R Block has come under fire for the incident and taken full credit for the error.
"I want you to know that we hear the frustration of those impacted by this issue loud and clear, and we're working every avenue we can to get your refund to you as fast as possible," H&R Block CEO Bill Cobb wrote in a post on the company's blog and Facebook page.
Two class action lawsuits filed in U.S. District Courts alleged that H&R Block failed to comply with IRS regulations and procedures, MarketWatch reported. The complaints noted that the delayed refunds had caused disruption in many households counting on the money. In particular, the delays have created complications for many students applying for financial aid at colleges.
An overlooked software feature should not have to be an added source of stress and public criticism during an already challenging business period. With tools such as static analysis, businesses can catch errors before they are released, avoiding incidents that might trigger customer complaints or legal action.
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