In August 2005, H&R Block announced that it had overstated its earnings for 2003 and 2004 by $91. 1 million. The company stated that it had "insufficient resources" to identify and report complex transactions in its corporate tax accounting. On February 23, 2006, the company said in its quarterly results that it had miscalculated its own state income taxes for 2005 and 2004, and that it owed an additional $32 million in back taxes. That mistake, plus Block's lower-than-expected earnings for the quarter, caused its stock price to drop by 8. 5 percent in one day. On April 30, 2008, the company's liability recorded for "uncertain tax positions" totaled $137. 6 million (excluding related interest and penalties). According to H&R Block, "This liability represents an estimate of tax positions we have taken in our tax returns that may ultimately not be sustained upon examination by the tax authorities. " Estimated gross interest and penalties relating to these potential assessments totaled an additional $47. 5 million.
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