BUSINESS MEMO: TAX PREPARATION AGREEMENT

H&R Block Inc. has bought Bay Colony Ltd., a tax preparation service based in Richmond, Va., for about $20 million.

Bay Colony has 178 offices in Virginia and northeast North Carolina. The company prepared more than 152,000 tax returns in fiscal year 1996, H&R Block said in announcing the deal Monday.

The Kansas City-based H&R Block is a diversified company offering tax and financial services. The company served 17.4 million taxpayers in 1996 in nearly 9,700 offices worldwide.

Thomas L. Zimmerman, president of H&R Block Tax Services, said Block's ownership of Bay Colony "provides greater growth opportunities by capitalizing on our ability to introduce new products and services."