The Virginia Beach, Va.-based franchisor reported net income of slightly more than $18 million, compared to $8.1 million for 2015. Revenue rose to $173.4 million for the most recently ended year, compared to $162.2 million the prior year.
In this week's earnings webcast, CEO John Hewitt hit a theme that has been expounded by officials at H&R Block—and that is that independent preparers and returns prepared online are subject to far less regulation and controls than are the chains. And that has produced a market place shift.
"The reason the independents have taken share is fraud," Hewitt said. Block CEO Bill Cobb has had the same complaint. They claim because of the laxer standards for the other preparers, individuals that wish to file fraudulent returns, particularly involving the Earned Income credit, turn away from the national chains.
Tax preparation fee income hit $19.3 million, up 39 percent from $13.9 million for last year's corresponding period. That came as Liberty prepared 1,832,000 returns in the United States during the recent tax season, down from 1,907,000 a year ago. The number of Canadian returns dropped to 330,000 from 340,000.
Revenue from financial products rose to $45.3 million an increase of 22.3 percent from $37.1 million prior year the prior year. While the rate of growth was not as steep as for tax preparation fees, the $8.3 million increase in revenue from this program represented the bulk of the $11.3 million in increased income for the year.