Henry W. Bloch, pioneer of tax preparation, is dead at 96
  • Monday, May 20, 2019
  • 80°
Top News

Henry W. Bloch, pioneer of tax preparation, is dead at 96

  • LAUREN CHAPIN/THE KANSAS CITY STAR VIA ASSOCIATED PRESS

    Henry W. Bloch, a co-founder of tax preparation giant H&R Block Inc., as seen in Dec. 1996. Tax preparer H&R Block said its co-founder, Henry Bloch, has died at the age of 96.

Henry W. Bloch, who founded the tax preparation company H&R Block with his brother and was its folksy pitchman in television commercials for decades, helping to establish it as one of the most recognizable brands in American business, died today in Kansas City, Missouri. He was 96.

His death, in hospice care, was announced by the company on its website. He was a lifelong resident of Kansas City.

After eight years of nearly profitless struggle, Henry and Richard Bloch’s company began thriving in the mid-1950s as they transformed a tiny bookkeeping operation in Kansas City into the nation’s dominant income-tax concern, preparing at its peak 1 in every 6 U.S. returns.

In the process, they not only essentially created an industry but were also among the nation’s franchising pioneers, with thousands of H&R Block offices springing up across the United States and abroad.

For decades, H&R Block’s TV commercials became tax-season fixtures, often featuring the soberly attired, gray-haired Henry Bloch as chief pitchman.

“Don’t face the tax laws alone,” he said after one particularly intimidating Washington tax-code overhaul. “Our people will get you the maximum refund you’re entitled to.” (A frequent catchphrase was “What can we find for you?”)

Henry Wollman Bloch was born in Kansas City on July 30, 1922, the middle son of Leon E. Bloch and Hortense (Bienenstok) Bloch, who was known as Horty. His father was a prominent lawyer in the city; his mother was a homemaker who read philosophy avidly and whose ancestors were among the first to settle Kansas. Henry graduated from the University of Michigan in 1944.

After the Japanese bombed Pearl Harbor, he enlisted in the Army Air Forces and served as a B-17 navigator, flying 31 combat missions over Germany, three over Berlin, and winning the Air Medal and three oak leaf clusters. The Army later sent him to the Harvard Business School to study statistics.

But by then he had been nurturing entrepreneurial ambitions. “My brothers and I were always thinking up different businesses we could start,” he once recalled, “but none of them felt right.”

A turning point came when he read the transcript of a speech by the noted economist Sumner H. Slichter, who taught at Harvard, arguing for the importance of the small business sector to the health of the postwar American economy.

Bloch soon envisioned one day starting a firm that would supply a broad menu of financial services to small businesses, including accounting, bill collection, temporary employment and tax preparation — notwithstanding the fact that he had taken only one semester of accounting in college. “I just hated it,” he said.

At 24, after a brief stint as a stockbroker and with $5,000 borrowed from a great-aunt in New York City, he and his older brother, Leon Jr., established the United Business Co. in a storeroom office that they rented for $50 a month. (The great-aunt was Kate Wollman, who lived in the Waldorf-Astoria hotel and had donated the Wollman ice-skating rink in Central Park, later refurbished by Donald Trump, to the city.)

The brothers soon landed bookkeeping jobs for small accounts, including a hamburger stand. But growth was slow, and Leon left to return to law school.

Henry, however, held on and took out a help-wanted ad to find someone to replace his brother. It drew a response from his mother, who suggested that he team up with his younger brother, Richard, a graduate of the Wharton School at the University of Pennsylvania.

By 1954, Hank and Dick Bloch had built a thriving 12-employee business in bookkeeping. Tax preparation was provided mostly as a courtesy to a few customers and friends, but it produced so little revenue that the brothers decided to discontinue it just before the 1955 tax season, when they were already working seven days a week. They alerted The Kansas City Star, where the brothers had been advertising their services.

But an ad salesman there had a different thought: Instead of abandoning tax preparation, he said, promote it. The brothers agreed, and took out a small ad depicting a man behind an eight-ball. “Taxes, $5,” the headline read.

The first day the ad ran, in late January 1955, it touched off a near stampede. Henry had been out visiting clients at the time when his brother called him. “Hank, get back here as quick as you can!” Richard said. “We’ve got an office full of people.”

Not only had taxpayers recently received their W-2 forms; the brothers also subsequently learned that the Internal Revenue Service was in the process of ending its long-standing practice of preparing tax returns free of charge. The service in Kansas City had just been halted.

Henry and Richard promptly organized a tax-specialist firm to replace United Business and named it H&R Block (using their first initials but turning the “h” in their surname into a “k,” for fear that the firm might otherwise be mispronounced as “H&R Blotch”).

It flourished, generating more than $20,000 (almost $200,000 in today’s dollars) within weeks — nearly a third of what United Business had been earning annually. The firm was also aided by the IRS’s decision to discontinue free tax preparation in New York City, leading the Bloch brothers to open seven offices there in 1956.

To oversee the New York operation, the brothers would spend alternate two-week shifts in the city while renting a house in suburban Scarsdale, New York.

That arrangement, however, separated them unduly from their families and put a strain on their ability to supervise the entire enterprise. The brothers soon put the New York business on the market and found two accountants who wanted to buy it.

But when the prospective purchasers could not meet the Blochs’ asking price, negotiations led to a fee and royalty agreement in 1957, launching what became the firm’s franchise network.

The company says it now has about 12,000 tax offices in the United States and other countries and had annual revenues of more than $3.1 billion in fiscal 2018, when it prepared 23 million tax returns worldwide.

In 1962, with Block offices numbering 206, the company made an initial public offering of its shares: 75,000 at $4 each, or about $34 today. (It was trading at $26.44 on the New York Stock Exchange today.)

Bloch, who had once been barred from a Kansas City country club because he was Jewish, became a wealthy man and eventually a philanthropist in his native state. A particular beneficiary was the University of Missouri, Kansas City, where the School of Business and Public Administration and the School of Management bear his name. His brother Leon also gave money to the university for a law library, which is named after him.

Richard retired in 1971 to support research and education on cancer. He had survived lung cancer, after receiving a terminal diagnosis, and then colon cancer. He sold his interest in the company in 1982 and died of heart failure in 2004 at 78. Leon died at 91 in 2012.

H&R Block, as a diversified financial services company, lost some its luster after 2000, when Henry stepped down as chairman and retired (though he remained as an active unofficial overseer). It suffered heavy losses in the mortgage market in the 2000s and from lawsuits alleging that it had taken advantage of poor people in extending loans in anticipation of tax refunds. It was also forced to restate earnings to correct accounting errors in its own tax returns.

Henry was succeeded by series of chief executives from outside the Bloch family. The current president and chief executive is Jeff Jones.

In recent years, Block has been challenged by new competitors and has closed thousands of offices with the rise of online do-it-yourself tax preparation, though the company has built a solid software business as well.

Henry’s wife, Marion, died in 2013 after a 25-year struggle with brain cancer. He is survived by two daughters, Mary Jo Brown and Elizabeth Uhlmann; two sons, Robert and Thomas; 12 grandchildren; and 19 great-grandchildren.

His son Thomas M. Bloch is the author of “Many Happy Returns: The Story of Henry Bloch, America’s Tax Man” (2011).

Beginning in the 1970s, Henry Bloch and his wife became avid art collectors, amassing a collection of two dozen impressionist and post-impressionist paintings by, among others, Manet, Van Gogh, Gauguin, Cézanne, Bonnard, Seurat, Pissarro, Matisse and Monet. He had said that all would eventually go to the Nelson-Atkins Museum of Art in Kansas City.

“I think the paintings are lonely in our house,” Bloch was quoted as saying in “Many Happy Returns.” “They’ll be much happier in the museum.”

Comments (1)

By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines.

Having trouble with comments? Learn more here.

Scroll Up