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H&R BLOCK WEB SITE REVEALS TAX DATA

Posted on February 17, 2000

      H&R Block has been forced to shut down its online tax-preparation Web site due to a mix-up that exposed the tax data of some consumers.

      It's the latest in an expanding list of embarrassing gaffes on the Internet that appear to be undermining public confidence in online security.

      H&R Block had closed the site earlier this month after it was overloaded with too much traffic.

      The latest problem was discovered Monday, said H&R Block (NYSE:HRB) spokesman Neil Getzlow. The problem affected about 10 customers out of the roughly 300,000 who have used the service to file taxes online. The problem exposed the tax data of those users to an undisclosed number of other users, but it did not affect the transmission of that data to the IRS. Getzlow said the company traced the problem to a programming bug in the online tax preparation program and said it did not affect the company's TaxCut software. The company will keep the site offline while it works to make sure the bug will not reoccur, he said. H&R Block hopes to have the site back up by this weekend.

      Online tax filing has become more popular in recent years and is strongly encouraged by the IRS, which says it cuts down on errors and speeds up the process. The latest twist is to prepare the entire return online, as with H&R Block's program. Intuit Corp. (NASDAQ:INTU) said today that 875,000 people have begun entering tax data online through its TurboTax for the Web product, and 405,00 have actually completed their returns. But mix-ups like H&R Block's, along with the recent rash of security problems and Internet attacks, may be scaring off consumers.

      For instance, 90 percent of consumers surveyed by PC Data Inc. said they were concerned about online security in the wake of the hack attacks on popular sites such as eBay (NASDAQ:EBAY) and Yahoo! (NASDAQ:YHOO) last week.

      Almost half of those polled said they would think twice before sharing credit card data over Net, the company found.

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