H&R Block Inc., the largest U. S. tax preparer, revealed that it would not be in a position to fulfill its fiscal 2010 outlook as high levels of unemployment resulted in a drop in tax filings.

As a consequence, its shares registered a 3% fall in premarket trading at $19.13. The stock through the close on Tuesday was down 1.8% the past year.

The company has augured between $1.60 and $1.80 a share in earnings for the year ending in April. However, this season's total tax returns through Feb. 15 are down 6.3% compared to the previous year.

Chief Executive Russ Smyth on Wednesday, blaming the recession and the unemployment rate for this year's performance, said, "The weak economic conditions have also contributed to a greater shift to do-it-yourself tax preparation methods among first-half clients."We still have millions of clients to serve in the second half of the tax season, which we are aggressively targeting".

H&R Block Chairman Richard Breeden, who once chaired the U. S. Securities and Exchange Commission, has refocused the company on tax preparation after taking charge in 2007, shedding a money-losing subprime mortgage unit and a securities brokerage and reducing mortgage exposure at its H&R Block Bank unit.