EMPLOYMENT AGREEMENT

Exhibit 10.26

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“ Agreement ”) is entered into as of July 12, 2005, by and between H & R Block Digital Tax Solutions, LLC, a Delaware limited liability company (the “ Company ”), and Thomas A. Allanson (“ Executive ”).

ARTICLE ONE

EMPLOYMENT

     1.01 Agreement as to Employment. Effective as of the date hereof (the " Employment Date ”), the Company hereby employs Executive to serve in the capacity set forth in Section 1.02, and Executive hereby accepts such employment by the Company, in each case, subject to the terms and conditions of this Agreement. The Company reserves the right, in its sole discretion, to change the title of Executive at any time.

     1.02 Duties.

     (a) Executive is employed by the Company to serve as its Senior Vice President Digital Tax Solutions, subject to the authority and direction of the Board of Directors of H&R Block, Inc., a Missouri corporation (“ Block ”), and its President and Chief Operating Officer. Subject to the foregoing, Executive will have such authority and responsibility as is customarily associated with the position of Senior Vice President Digital Tax Solutions. The Company reserves the right to modify, delete, add, or otherwise change Executive’s job responsibilities or the person or persons to whom Executive reports, in its sole discretion, at any time. Executive will also perform such other duties as are reasonably assigned to Executive from time to time.

     (b) So long as Executive is employed by the Company pursuant to the terms hereof, Executive agrees to devote Executive’s full business time and efforts exclusively on behalf of the Company and to competently and diligently discharge Executive’s duties hereunder, provided that Executive will not be prohibited from engaging in such personal, charitable, or other nonemployment activities that do not interfere with Executive’s full-time employment hereunder and that do not violate the other provisions of this Agreement or the H&R Block, Inc. Code of Business Ethics & Conduct, which Executive hereby acknowledges having read and fully understood. By execution hereof, Executive hereby represents that his only other employment activities consist of his involvement, on a limited basis, in certain equipment leasing activities (“ Equipment Leasing Activities ”), such Equipment Leasing Activities not interfering with Executive’s full-time employment and obligations hereunder. Executive will comply fully with all reasonable policies of the Company, Block and/or any other direct or indirect subsidiary of Block or parent entity of any of their respective affiliates (the Company, Block and/or any other direct or indirect subsidiary of Block or parent entity or any of their respective affiliates being collectively referred to herein as the “ Block Entities ”) as are from time to time in effect and applicable to Executive’s position. Executive understands that the

business of the Block Entities may be subject to governmental regulation, some of which may require Executive to submit to background or similar investigations. If Executive or any Block Entity are unable to participate, in whole or in part, in any such activity as the result of any action or inaction on the part of Executive, then this Agreement and Executive’s employment hereunder may be terminated by the Company without notice.

     1.03 Compensation .

     (a)  Base Salary . The Company will pay to Executive a gross salary at an annual rate of Two Hundred Sixty Five Thousand and no/100 Dollars (US $265,000.00) (“ Base Salary ”), payable semimonthly or at any other pay periods as the Company may use for its other similarly-situated employees. The Base Salary will be reviewed for adjustment no less often than annually during the term of Executive’s employment hereunder and, if adjusted, such adjusted amount will become the “ Base Salary ” for purposes of this Agreement.

     (b)  Short-Term Incentive Compensation . Executive shall participate in the HRB Management, Inc. short-term incentive program that is based on the H&R Block Short-Term Incentive Plan (the “ Program ”) as applicable to executives of the Company for its current fiscal year. Under the Program, Executive shall have an aggregate annual target incentive award equal to fifty percent (50%) of his Base Salary (“ Target Bonus ”), and an opportunity to earn up to two times such Target Bonus, i.e., one hundred percent (100%) of his Base Salary. The payment of the actual award under the Program shall be based upon such performance criteria which shall be determined by the Compensation Committee of Block’s Board of Directors. Under the Program for the Company’s current fiscal year only, Executive’s actual incentive compensation shall be prorated based upon Executive’s actual gross wages for the fiscal year, provided that Executive must remain employed through April 30, 2006 to receive any payments under the Program. Such incentive compensation shall be paid to Executive following the completion of its current fiscal year when the same is paid to other similarly situated Company employees.

     (c)  Stock Options . As authorized under the H&R Block 2003 Long-Term Executive Compensation Plan, as amended (the “ 2003 Plan ”), subject to the terms of the related Option and Restricted Stock Agreement (as such term is defined in the Stock Purchase Agreement), Executive shall be granted on the Employment Date a stock option under the 2003 Plan to purchase ten thousand (10,000) shares of Block’s common stock at an option price per share equal to the closing price of such shares on the New York Stock Exchange on the date of grant, such option to expire on the tenth anniversary of the date of grant; to vest and become exercisable as to one-third (three thousand three hundred thirty-three (3,333)) of the shares covered thereby on the first anniversary of the date of grant, as to an additional one-third (three thousand three hundred thirty-three (3,333)) of such shares on the second anniversary of the date of grant, and as to the remaining one-third (three thousand three hundred thirty-four (3,334)) of the shares on the third anniversary of the date of grant; to be an incentive stock option for the maximum number of shares permitted by Internal Revenue Code Section 422 and the regulations promulgated thereunder; and to otherwise be a nonqualified stock option. In

accordance with the terms of the Option and Restricted Stock Agreement, any non-vested portion of stock options awarded pursuant to this Section 1.03(c) shall vest upon a “ Change of Control ,” as such term in defined in the Option and Restricted Stock Agreement.

     (d)  Restricted Stock . Subject to the terms of the related Option and Restricted Stock Agreement (as such term is defined in the Stock Purchase Agreement), Executive shall also be awarded promptly after the Employment Date, one thousand two hundred (1,200) restricted shares of Block’s common stock under the 2003 Plan. One-third of the such restricted shares shall vest (i.e., the restrictions on such shares shall terminate), respectively, on each of the first three anniversaries following the Employment Date. Prior to the time such restricted shares are so vested, (i) such restricted shares shall be nontransferable, and (ii) Executive shall be entitled to receive any cash dividends payable with respect to unvested restricted shares and vote such unvested restricted shares at any meeting of Block’s shareholders. The terms of the restricted stock grant reference herein will be more specifically set forth in a separate agreement to be entered into between Block and Executive.

     1.04 Expenses .

     (a)  Travel Expenses . For a period of ninety (90) days from and after the Employment Date, the Company will promptly pay directly, or reimburse Executive for all travel expenses incurred in traveling between San Diego and Kansas City, including, but not limited to, lodging and meal expenses, to the extent that such expenses are paid or incurred by Executive and to the extent that such expenses are reasonable and necessary to Executive’s conduct pursuant to the terms hereof. After such ninety (90) day period, the Company will promptly pay directly, or reimburse Executive for all travel expenses incurred in traveling between San Diego and Kansas City, including travel expenses, but excluding all lodging and meal-related expenses, to the extent that such expenses are paid or incurred by Executive and to the extent that such expenses are reasonable and necessary to Executive’s conduct pursuant to the terms hereof. In any event, the Company’s reimbursement of Executive for any such expenses shall be in a manner consistent with and subject to the terms of the Company’s related policies in effect from time to time.

     (b)  Business Expenses . Subject to the provisions of Section 1.04(a) above, the Company will promptly pay directly, or reimburse Executive for, all business expenses, to the extent such expenses are paid or incurred by Executive during the term hereof in accordance with the Company’s policy in effect from time to time and to the extent such expenses are reasonable and necessary to Executive’s conduct pursuant to the terms hereof.

     1.05 Fringe Benefits . During the term of Executive’s employment hereunder, and subject to the discretionary authority given to applicable benefit plan administrators, the Company will make available to Executive such insurance, sick leave, deferred compensation, short-term incentive compensation, bonuses, stock options, retirement, vacation, and other like benefits as are approved and provided from time to time to the other similarly situated employees of the Company or the other Block Entities.

     1.06 Termination of Employment .

     (a)  Without Notice . The Company may, at any time, in its sole discretion, terminate this Agreement and the employment of Executive without notice in the event of:

     (i) Executive’s misconduct that interferes with or prejudices the proper conduct of the business of any Block Entity or which may reasonably result in harm to the reputation of any Block Entity; or

     (ii) Executive’s commission of an act materially and demonstrably detrimental to the goodwill of any Block Entity, which act constitutes gross negligence or willful misconduct by Executive in the performance of Executive’s duties hereunder; or

     (iii) Executive’s commission of any act of dishonesty or breach of trust resulting or intending to result in material personal gain or enrichment of Executive at the expense of any Block Entity; or

     (iv) Executive’s violation of Article Two or Three of this Agreement; or

     (v) Executive’s conviction of a misdemeanor (involving an act of moral turpitude) or a felony; or

     (vi) Executive’s failure in material respect to discharge Executive’s duties hereunder as measured by the performance of matters within Executive’s areas of responsibility against the plans and objectives prepared by Executive and any Block Entity in the ordinary course; or

     (vii) Executive’s unwillingness to make all necessary travel to and from the Company’s headquarters;

     (viii) the results of any Background Check (as such term is defined in the Stock Purchase Agreement (as defined below)) are, in the reasonable opinion of Purchaser (as such term is also defined in the Stock Purchase Agreement), unsatisfactory; or

     (ix) Executive’s suspension by the Internal Revenue Service from participation in the Electronic Filing Program; or

     (x) The inability of Executive or any Block Entity to participate, in whole or in part, in any activity subject to governmental regulation as the result of any action or inaction on the part of Executive, as described in Section 1.02(b); or

     (xi) Executive’s death or total and permanent disability. The term “ total and permanent disability ” will have the meaning ascribed thereto under any long-term disability plan maintained by any Block Entity for employees of the Company.

     (b)  With Notice . Either party may terminate this Agreement for any reason, or no reason, by providing not less than forty-five (45) days’ prior written notice of such termination to the other party, and, if such notice is properly given, this Agreement and Executive’s employment hereunder will terminate as of the close of business on the forty- fifth (45 ^th ) day after such notice is given or such later date as is specified in such notice.

     (c)  Termination Due to a Change of Control .

     (i) If Executive terminates Executive’s employment under this Agreement during the one hundred eighty (180)-day period following the date of the occurrence of a “ Change of Control ” (as defined below) of Block then, upon any such termination of Executive’s employment and conditioned on Executive’s execution of an agreement under which Executive releases all known and potential claims against each Block Entity, the Company will provide Executive, at Executive’s election (the “ Change of Control Election ”), the same level of severance compensation and benefits as would be provided under the H&R Block Severance Plan (the “ Severance Plan ”) as the Severance Plan exists either (A) on the date of this Agreement or (B) on Executive’s last day of active employment by the Company pursuant to the terms hereof (the “ Last Day of Employment ”), as if Executive had incurred a “ Qualifying Termination ” (as such term is defined in the Severance Plan). The Severance Plan as it exists on the date of this Agreement is attached hereto as Exhibit A . Executive must notify the Company in writing within five (5) Business Days (as such term is defined in the Stock Purchase Agreement, dated of even date herewith, among H&R Block Digital Tax Solutions, LLC, Executive and the other parties thereto (“ Stock Purchase Agreement ”)) after Executive’s Last Day of Employment of Executive’s Change of Control Election. Severance compensation and benefits provided under this Section will terminate immediately if Executive violates Sections 3.02, 3.03, or 3.05 of this Agreement or becomes reemployed by any Block Entity.

     (ii) For the purpose of this subsection, a “ Change of Control ” means:

     (A) the acquisition, other than from Block, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-five percent (35%) or more of the then outstanding voting securities of Block entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by any Block Entity, or any employee benefit plan (or related trust) of any Block Entity, or any corporation with respect to which, following such

acquisition, more than fifty percent (50%) of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the voting securities of Block immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding voting securities of Block entitled to vote generally in the election of directors, as the case may be; or

     (B) individuals who, as of the date hereof, constitute the Board of Directors of Block (generally, the “ Board ,” and as of the date hereof, the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board, provided that any individual or individuals becoming a director subsequent to the date hereof, whose election, or nomination for election by Block’s shareholders, was approved by a vote of at least a majority of the Board (or nominating committee of the Board) will be considered as though such individual were a member or members of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of Block (as such terms are used in Rule 14a-l 1 of Regulation 14A promulgated under the Exchange Act); or

     (C) the completion of a reorganization, merger or consolidation approved by the shareholders of Block, in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the voting securities of Block immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than fifty percent (50%) of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such reorganization, merger or consolidation, or a complete liquidation or dissolution of Block, as approved by the shareholders of Block, or the sale or other disposition of all or substantially all of the assets of Block, as approved by the shareholders of Block.

     (d)  Severance . Executive will receive severance compensation and benefits as would be provided under the Severance Plan, as the same may be amended from time to time, if Executive incurs a “ Qualifying Termination. ” as such term is defined in the Severance Plan (and without regard to whether the termination is with or without notice under this Agreement), and executes an agreement under which Executive releases all known and potential claims against any Block Entity. Such compensation and benefits will, at Executive’s election (the “ Severance Election ”) be at the same level of severance compensation and benefits as would be provided under the Severance Plan as such plan

exists either (A) on the date of this Agreement, or (B) Executive’s Last Day of Employment; provided , however , (1) the “ Severance Period ” (as such term is defined in the Severance Plan) will be 12 months, notwithstanding any provision in the Severance Plan to the contrary, and (2) Executive will be credited with not less than 12 “ Years of Service ” (as such term is defined in the Severance Plan) for the purpose of determining severance compensation under Section 4(a) of the Severance Plan as it exists on the date of this Agreement or the comparable section of the Severance Plan as it exists on Executive’s Last Day of Employment, notwithstanding any provision in the Severance Plan to the contrary, and (3) all restrictions on any restricted shares awarded to Executive that would have vested in accordance with their terms by reason of lapse of time within eighteen (18) months of Executive’s Last Day of Employment (absent such termination of employment) shall terminate (and such restricted shares shall be fully vested) and any restricted shares that would not have vested in accordance with their terms by reason of lapse of time within eighteen (18) months after Executive’s Last Day of Employment shall be forfeited, notwithstanding any provision of the related Option and Restricted Stock (or similar) Agreement or Severance Agreement to the contrary. Executive must notify the Company in writing within five (5) Business Days after Executive’s Last Day of Employment of Executive’s Severance Election. Severance compensation and benefits provided under this Section will terminate immediately if Executive violates Sections 3.02, 3.03, or 3.05 of this Agreement or becomes reemployed with by any Block Entity.

     (e)  Further Obligations . Upon termination of Executive’s employment under this Agreement, no Block Entity will have any further obligations under this Agreement and no further payments of Base Salary or other compensation or benefits will be payable by any Block Entity to Executive, except (i) as set forth in this Section, (ii) as required by the express terms of any written benefit plans or written arrangements maintained by any Block Entity and applicable to Executive at the time of such termination of Executive’s employment, or (iii) as may be required by law. Any termination of this Agreement, however, will not be effective as to Sections 3.02, 3.03 and 3.05, or any other portions or provisions of this Agreement which, by their express terms, require performance by either party following termination of this Agreement.

ARTICLE TWO

CONFIDENTIALITY

     2.01 Background and Relationship of Parties . The parties hereto acknowledge (for all purposes, including, without limitation, Articles Two and Three of this Agreement) that the various Block Entities have been and will be engaged in a continuous program of acquisition and development respecting their businesses, present and future, and that, in connection with Executive’s employment by the Company, Executive will be expected to have access to all information of value to the various Block Entities and that Executive’s employment creates a relationship of confidence and trust between Executive and the Block Entities with respect to any information applicable to the businesses of the Block Entities. Executive will possess or have unfettered access to

information that has been created, developed, or acquired by the Block Entities or otherwise become known to the Block Entities and which has commercial value in the businesses in which the Block Entities have been and will be engaged and has not been publicly disclosed by the Block Entities. All information described above is hereinafter called “ Proprietary Information .” By way of illustration, but not limitation, Proprietary Information includes trade secrets, customer lists and information, employee lists and information, developments, systems, designs, software, databases, know-how, marketing plans, product information, business and financial information and plans, strategies, forecasts, new products and services, financial statements, budgets, projections, prices, and acquisition and disposition plans. Proprietary Information does not include any portions of such information which are now or hereafter made public by third parties in a lawful manner or made public by parties hereto without violation of this Agreement.

     2.02 Proprietary Information is Property of Block .

     (a) All Proprietary Information is the sole property of Block (or the applicable Block Entity) and its assigns, and Block (or the applicable Block Entity) is the sole owner of all patents, copyrights, trademarks, names, and other rights in connection therewith and without regard to whether Block (or any applicable Block Entity) is at any particular time developing or marketing the same. Executive hereby assigns to Block any rights Executive may have or may acquire in such Proprietary Information. At all times during and after Executive’s employment with the Company, Executive will keep in strictest confidence and trust all Proprietary Information and Executive will not use or disclose any Proprietary Information without the written consent of Block, except as may be necessary in the ordinary course of performing duties as an employee of the Company or as may be required by law or the order of any court or governmental authority.

     (b) In the event of any termination of Executive’s employment hereunder, Executive will promptly deliver to the Company all copies of all documents, notes, drawings, programs, software, specifications, documentation, data, Proprietary Information, and other materials and property of any nature belonging to any Block Entity and obtained during the course of Executive’s employment with the Company. In addition, upon such termination, Executive will not remove from the premises of the Company or any other Block Entity any of the foregoing or any reproduction of any of the foregoing or any Proprietary Information that is embodied in a tangible medium of expression.

ARTICLE THREE

NON-HIRING; NON-SOLICITATION; NO CONFLICTS; NON-COMPETITION

     3.01 General . The parties hereto acknowledge that, during the course of Executive’s employment by the Company, Executive will have access to information valuable to the Company and the other Block Entities concerning the employees of the Block Entities (collectively, “ Block Employees ”) and, in addition to Executive’s access to such information, Executive may, during (and in the course of) Executive’s

employment by the Company, develop relationships with such Block Employees whereby information valuable to the various Block Entities concerning the Block Employees was acquired by Executive. Such information includes, without limitation: the identity, skills, and performance levels of the Block Employees, as well as compensation and benefits paid to such Block Employees. Executive agrees and understands that it is important to protect the Block Entities and the Block Employees, and the various agents, directors, clients and other representatives of the Block Entities from the unauthorized use and appropriation of Block Employee information, Proprietary Information, and trade secret business information developed, held, or used by any Block Entity, and to protect the Block Entities, the Block Employees and the agents, directors, customers and other representatives of the Block Entities, Executive agrees to the covenants described in this Article Three.

     3.02 Non-Hiring . During the period of Executive’s employment hereunder, and for a period of one (1) year after Executive’s Last Day of Employment, Executive may not directly or indirectly recruit, solicit, or hire any Block Employee or otherwise induce any such Block Employee to leave the employment to become an employee of or otherwise be associated with any other party or with Executive or any company or business with which Executive is or may become associated. The running of the one (1)- year period will be suspended during any period of violation and/or any period of time required to enforce this covenant by litigation or threat of litigation.

     3.03 Non-Solicitation . During the period of Executive’s employment hereunder and during the time Executive is receiving payments hereunder, and for two (2) years after the later of Executive’s Last Day of Employment or cessation of such payments, Executive may not directly or indirectly solicit or enter into any arrangement with any person or entity which is, at the time of the solicitation, a significant customer of any Block Entity for the purpose of engaging in any business transaction of the nature performed by such Block Entity, or contemplated to be performed by such Block Entity, for such customer, provided that this Section 3.03 will only apply to customers for whom Executive personally provided services while employed by the Company or customers about whom or which Executive acquired material information while employed by the Company. The running of the two (2)-year period will be suspended during any period of violation and/or any period of time required to enforce this covenant by litigation or threat of litigation.

     3.04 No Conflicts . Executive represents in good faith that, to the best of Executive’s knowledge, the performance by Executive of all the terms of this Agreement will not breach any agreement to which Executive is or was a party and which requires Executive to keep any information in confidence or in trust. Executive has not brought and will not bring to any Block Entity, nor will Executive use in the performance of employment responsibilities at the Company any proprietary materials or documents of a former employer that are not generally available to the public, unless Executive has obtained express written authorization from such former employer for their possession and use. Executive has not and will not breach any obligation of confidentiality that

Executive may have to former employers and Executive will fulfill all such obligations during Executive’s employment with the Company.

     3.05 Non-Competition . During the period of Executive’s employment hereunder and during the time Executive is receiving payments hereunder, and for two (2) years after the later of Executive’s Last Day of Employment or cessation of such payments, Executive may not engage in, or own or control any interest in (except as a passive investor in less than one percent (1%) of the outstanding securities of publicly held companies), or act as an officer, director or employee of, or consultant, advisor or lender to, any firm, corporation, partnership, limited liability company, institution, business, government agency, or entity that engages in any line of business that is competitive with any Line of Business of Block (as defined below). “ Line of Business of Block ” means any line of business (including lines of business under evaluation or development) of the Company, as well as any one or more lines of business (including, without limitation, lines of business under evaluation or development) of any Block Entity with which Executive was involved during the two (2)-year period preceding Executive’s Last Day of Employment, provided that, “Line of Business of Block” will, in all events, include, but not be limited to, the business conducted by Taxnet Inc. on and before the date hereof, and the business, and any related products and services, related to the preparation of tax returns, whether on-line, electronically or professionally assisted, including, without limitation, through the use or sale of software, and provided further that if Executive’s employment was, as of the Last Day of Employment or during the two (2)-year period immediately prior to the Last Day of Employment, with the Company or any successor entity thereto, “Line of Business of Block” means any line of business (including lines of business under evaluation or development) of any Block Entity. Notwithstanding the foregoing, for purposes hereof, “ Line of Business of Block ” shall not include the Equipment Leasing Ac