When the IRS shuttered their service, the Bloch brothers were there to help America out.
Henry Bloch was born in Kansas City, Missouri in 1922 and studied at the University of Missouri–Kansas City before transferring to the University of Michigan where he would earn a degree in mathematics. From school Henry joined the US Army Air Corps and trained to become a navigator. He was sent to Europe and flew 32 missions over Germany, three over Berlin itself, earning the Air Medal and three oak leaf clusters for his efforts. Following the end of the war he would attend Harvard University, where he studied business.
Richard Bloch was born in 1926, also in Kansas City. He studied Economics at the Warton Business School at the University of Pennsylvania and was the youngest member of his graduating class in 1945. A natural businessman, he helped pay for his school by buying used cars, repairing them and selling them for a profit.
That was the same year Henry and their other brother, Leon, with a $5,000 loan from an aunt and started United Business Company offering accounting, bookkeeping and tax preparation services for clients in Kansas City. The aunt, Kate Wollman, who lived in New York, had 5 years before donated $600,000 to New York City for the construction of the Wollman Skating Rink in Central Park. (Henry’s middle name was Wollman.)
When Leon later decided to quit the business for law school, Henry (who went by Hank) ran an ad in the paper for his replacement. His mother suggested that instead he bring his younger brother Dick onboard as he’d just graduated from business school.
For most of the next decade the brothers operated the business focusing on bookkeeping and accounting – despite the fact that Hank hated accounting and only took one semester of it! The business struggled but steadily grew until by 1954 their business employed 12 people. At that point tax preparation, which was mostly just a courtesy to a few customers and friends, was such a small part of their business that they were going to stop offering the service.
When they called the Kansas city Star, which is where they did most of their advertising, to tell them about the change of direction, the advertising salesman suggested that instead of dropping the service, they advertise it. The brothers agreed and the ad executive created their ad, which featured a man behind an 8-ball and a headline reading “Taxes, $5,”.
The day the ad ran Hank was out doing rounds visiting clients when Richard (who went by Dick) got hold of him and said “Hank, get back here as quick as you can! We’ve got an office full of people.”
The timing was perfect, January, 1955, and taxpayers had just received their W2 forms. In addition, the IRS had just stopped their free tax preparation services in Kansas City. Shocked by the demand but recognizing an opportunity when they saw one, the brothers incorporated H & R Block, changing the H in their name to a K in the company name so as to avoid mispronunciation.
From that point forward there was no more struggling and a few months into the new year they had earned as much money doing tax preparation as the entire business had done the previous year. Reacting to the IRS curtailing their services in New York City the next year, the brothers opened seven offices in New York in 1956. The following year, because they hated all the traveling demanded to run the New York offices, they decided to sell their operations there. But when they and the potential buyers couldn’t agree on a price, they negotiated a fee and royalty arrangement which became the company’s franchise model. Within 10 years there would be 1,700 H&R Block locations in 1,000 cities in 44 states.
More than just managing the business, Henry was its national pitchman in commercials featuring lines such as “Don’t face the tax laws alone,” and “Our people will get you the maximum refund you’re entitled to.”
Over the next thirty years H & R Block would expand into a wide variety of offerings from law to computer services to temporary office assistance, as well as credit card lending and mortgages, all while remaining the leader in tax preparation, at one time doing 1 out of every 9 American tax returns.
Richard would retire in the 1971 and spend a great deal of time with charitable endeavors, particularly cancer, something he overcame twice in retirement and he would die in 2004 at the age of 78.
Henry would leave the company in 1988 and would spend the next 30 years collecting art and figuring out different ways to give his money away. He and his wife Marion established the Marion and Henry Bloch Family Foundation to contribute to the Kansas Community via business and entrepreneurship education, healthcare; social services; education for low-income, underserved youth; visual and performing arts; and Jewish organizations in Kansas City. When he passed away in 2019 at the age of 96 his art collection, which included Monet, Manet, Van Gogh and others was bequeathed to the The Nelson-Atkins Museum of Art in the city.
H & R Block helped build and streamline the tax preparation business in the United States, coming along at the exact moment Americans needed their services. When the IRS stepped back the Blochs stepped up and were there to help, and they did, to the tune of millions then tens of millions of Americans over their careers. Everyone hates tax day and April 15th is a cloud that hangs over the heads of taxpayers for much of the first quarter of every year. The Bloch brothers saw an opportunity to earn money while giving Americans confidence in one of their most anxious experiences each year… Meeting the needs of customers is the best way to become a success in business. That’s exactly what the Bloch brothers did.
Further reading:
https://www.nytimes.com/2019/04/23/obituaries/henry-w-bloch-dead.html
https://en.wikipedia.org/wiki/Henry_W._Bloch