Cf you are correct. Stock value is near and dear to corporate's heart, after their paychecks.
Some one posted on this board years ago how dividends were the Bloch brothers livihood after they retired, and would always be paid.
In the 80's this stock was a money maker, due to Block's growth. I was not an investor back then, but did take advantage of buying 100 shares of stock options each year.
Growth was so good that within a few years, when I realized stock value equaled my mortgage balance, I sold and "burned my mortgage".
Money flowed to us workers back then, not only in stock options but in profit sharing and vacation hours if we put in 1,000 hours a year, which was easy to do with off season work or teaching a couple classes. Not only did 10 year preparers get 30% of their volume, there was other "side" dollars to be made.
After the son Tommy took over and invested in Compuserve, we had a class about our stock options which would also give us Compuserve stock. It was a "cheerleader" type class full of rosy promises. Didn't happen. Compuserve died and our stock options cost more than market value, and were worthless.
It became a hit or miss each year thereafter if we could make money on the options.
Profit sharing ended, the 401K started, and some years we had a matching quarter to the dollar, but most years there was no matching funds.
The last 2 for 1 split that I remember was when stocks were $60 a share, and they have gone down never to reach $30 again.
BUT, there was enough money to build that new KC building and up CEO pay to a jaw dropping level, at the same time as preparer pay went down.
I'm not an investor that follows the market. I tried and lost with and without brokers helping me. I stick to secure investments and think stocks & casinos have the same number of losers as winners.
I know many have posted here saying they made money on Block stocks and are happy with the results, calling us long term investors stupid, and they might just be right, as corporate takes too much off the top at management level, in pay and perks. Stocks go down while their pay goes up, explain that one.
"The price of a tax return goes up, when it cost more for rent, utilites, toner, and wages."
Actually, that depends on the type of organization under discussion. At the corporate level, there is little doubt that most products have already been priced to cover the basic costs of producing the product.
After that point, the concern is the effect of a price increase on earnings per share and stock price. In my opinion,Block tries to maximize earnings rather than to generate sustainable earnings.
Don't take it personally, Florida, you and your company are "the enemy" to those in the Block camp :-)
If that bothers you then you shouldn't post here, but somehow I don't think it does :-)
On March 14 at 1:45pm I said:
"I conduct intermediate and advanced classes and seminars throughout the summer months for my employees (not the general public). Last year we conducted an EA study course and had two employees complete the exams. Liberty makes the course materials available to all franchisees. Just as with Block, a franchisee can choose as much or as little as their need dictate."
Just in case you were implying I was somehow lying, which is how you made it sound...
But guess what? I would not require any employee that I knew well to just punch their ticket in the right places to keep their job. And if you think the 15 hours of CE required by the IRS is enough to guarantee your employees are good ones, that's just more mindlessness. I can tell you right now, there will be a lot of people who maintain the 15 hour requirement that I would not dream of hiring or rehiring.
This idea that punching your ticket in the right places is enough to ensure you'll be a good employee is among the larger piles of nonsense I've seen on this board. There is no substitute for knowing your employees. That's why I teach all my own courses. That's one of my favorite parts of this business. Liberty or Block or any other franchisee who thinks they have great staff by looking at their credentials is nuts.
price for a tax return can go up forever (CF)
The price of a tax return goes up, when it cost more for rent, utilites, toner, and wages. With only 3 months to earn enough to cover a full year's worth of expenses, plus the additional cost of training employees it's a total guessing game to number of returns any one office will do.
Because it's a "walk in" type business where people hate to wait longer than 10 minutes, it takes extra staff sitting around, that wouldn't be needed if we could get people to make appointments.
Now that IRS has implanted the new rules for preparers that require paying for IPIN#, test, and fingerprinting, to keep good employees, it's another company expense.
Unemployment cost has soared for all the businesses I do payroll for, from 2.2% to 6.38%!
YES, I did complain about Block's prices when I worked there. I knew I was losing clients that could no longer afford it. I like being in control and knowing when to discount. BUT, I also have to be reasonable with discounting, with overhead costs rising.
Yesterday, both my husband and I needed to fill our gas tank. Mine was $70, his was $81, it does make me honestly think, how many working people having to fill up once a week, won't be able to afford any service!
"If the chains didn't charge so much ..." (wishfulthinking)
From the "isn't it interesting department:"
The powers-that-be at Block (and other companies) seem to feel that the price for a tax return can go up forever, without any limits.
Perhaps they are right: there are always clients who are very happy because their prparer found them some significant tax savings.
On the other hand, it's more likely that management should pay attention to the lessons from the real estate market over the past few years. Many there assumed that the price of a house could rise without limit. And they did not realize this was an erroneous belief until it was too late.
"Initially I didn't think the new RTP rules were going to drive that many people out of the business, but I'm having second thoughts." (wishfulthinkin)
Although the new rules will have some effect, I still don't think that they will cause the major disruptions that some some are predicting. For example, I dons't forsee any bidding wars for the services of tax preparers. Especially after word gets out that the test is not as hard as many feared.
Still, it's likely that a significant number of current preparers will leave the business -- especially if they were thinking about retirement anyway. Just not the mass exodus that some are predicting.
There is, however, one thing that might cause a mass exodus: overly harsh enforcement of the due dligence rules by the IRS. If preparers see the IRS coming after them with those $500 fines (rather than just going after the "bad boys" of tax prep), major shifts can be expected.
floridataxguy, I don't recall your saying that the summer courses you offer are EA prep. Of course your EA employee has to take continuing ed if she wants to keep her enrollment, whether yours or someone else's. When I worked at Block I took lots of "outside" courses. They just had to be approved by a manager. They always were. So Block doesn't tie you to their courses, but they do require at least 24 hours of coursework.
The way you are responding to the posts is that you make exceptions for your employees. Surely you are aware of the IRS's new rules for paid preparers. They all now have to take at least 15 hours of continuing ed, including a certain number of update as well as ethics. You do realize you can't make exceptions to these rules don't you? The IRS is also in the process of certifying CPE providers. How will that work at Liberty? I'm sure the company's courses will be written to comply with the standards, but do the instructors have to be certified too? It's great that you spend the time and effort to teach your own courses, but is that going to work with the new standards?
Initially I didn't think the new RTP rules were going to drive that many people out of the business, but I'm having second thoughts. Where I work we have a lot of new clients whose previous preparers sent them letters announcing they are no longer preparing taxes. They didn't sell their practices or client lists, or even mention someone else the clients could go to. Some were mom and pops, but others were from professional firms. For years I've gone to seminars given by the professional associations that were filled with self-employed preparers who were there because they wanted to learn more. I just never thought that the IRS demanding they learn more would have such an effect. Or maybe I never realized how many people have test anxiety.
We have to stop accepting new clients soon, but yesterday wouldn't be soon enough. We are buried in returns, and everyone in the office is working 50-60+ hours a week. We had to put dozens of corporations on extension, and we'll have to do the same with individuals when time starts to run out. If the chains didn't charge so much, and had better reputations for consistently high quality, they could easily attract some of the overflow. And there might be more of it if established preparers keep leaving the business.