H&R Block Stock and Intuit Tumble on Direct Electronic Tax Filing Proposal
the parent company of software maker TurboTax, retreated Monday as the government prepares a recommendation on allowing people to file taxes electronically for free directly with the Internal Revenue Service.
The IRS’s current arrangements allow free online filing for federal returns with the help of a third-party tax preparation service, though Americans often have to pay to have state taxes prepared.
The FreeFile program with the IRS for federal taxes also isn’t widely used—it served just 3% of 100 million taxpayers last year. The majority of electronically filed tax returns were done by paid preparers, according to the IRS.
A report on free direct filing with the IRS will be released this week. The Inflation Reduction Act, passed last year, earmarked $80 billion for the Internal Revenue Service to upgrade its operations. Part of that will let people file their taxes online directly to the government, a move that will cut into revenues at the two companies.
The average American spends 13 hours and $250 each year to file their taxes, the IRS said.
(ticker: HRB) fell 3.1% at the market open.
(INTU) declined 2.8%.
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