Was This Year's Tax Season A Success? Investors Won't Know For A While

This year’s tax filing season is drawing to a close, but it may be another few months before Liberty Tax Inc (NASDAQ: TAX), Intuit Inc. (NASDAQ: INTU) and H & R Block Inc (NYSE: HRB) investors know exactly how much of a success this year’s tax season was.

The majority of the tax season will be included in the Q1 earnings reports of the three companies, which are set to be released starting with Intuit on May 19. However, even these Q1 earnings reports will not include the critical month of April.

To get a full picture of this year’s tax season, investors will likely have to wait until the national Taxpayer Advocate Service releases its statutorily mandated mid-year report to Congress in mid-July. This report will include details like the total number of individual returns processed, the total number of refunds, the average refund amount and statistics related to IRS customer service.

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Investors will be watching for the total number of returns. Last year, the IRS processed 126.1 million returns, up from 125.6 million in 2014. A surprisingly large number of total returns would likely be good news for tax service stocks like the ones mentioned above.

In recent years, funding cuts at the IRS have led to a sharp decline in customer service, another trend that could continue to add to the number of individuals that opt to hire a tax professional.

Disclosure: The author holds no position in the stocks mentioned.

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