It has been announced by the H&R Block Inc. in the recent days about its accomplishment of contacting federal investigators regarding the emergence of a probable conflict of interest that readily involves the nonconformist shareholder Richard Breeden, the former U.S. Securities and Exchange Commission chairman who is in quest of three board seats. It is to be noted in this respect that Mr. Richard Breeden, the Chairman and CEO of Breeden Capital Management was appointed in 2005 by the Justice Department for monitoring KPMG LLP's conformity with a $456 million settlement of a investigation while accusing it of setting up fraudulent tax shelters for wealthy clients.

Breeden Capital Management is a frontrunner fund investment firm based in Greenwich, Connecticut. Both the Breeden Partners and Breeden Capital Management were founded by Richard C. Breeden, the former Chairman of the U.S. Securities and Exchange Commission. The firm is said to have a total of approximately 20 professionals, and, together with its affiliates, it has more than $1 billion in assets under management. On the contrary, KPMG is the auditor of the H&R Block Inc.  and also happens to be the largest tax preparer of the United States. It has been found also issuing a proxy statement about its pleading to the U.S. Attorney Michael Garcia in Manhattan and also the chief accountant of the SEC for the acute consideration of the relationship of Breeden with KPMG. It has also been noted, that the H&R Block based in the Kansas City, Missouri is steadfastly urging the shareholders for endorsing the reappointment of KPMG as auditor. In the same extent it has also been found warning that the election of Breeden or his cohorts "would create a grave risk that KPMG would no longer be deemed to be independent."

However, in the meantime Breeden has been found rejecting the company's line of reasoning of the company. He said while talking to newsmen, "I am confident that H&R Block's shareholders will agree with me that the company's poor performance record under current management is of far greater concern than which accounting firm the company employs."