Tax Filing Shakeup: Trump’s Efficiency Team Considers Free App
Market Impact: H&R Block and Intuit Stocks Take a Hit
The stock prices of H&R Block and Intuit plummeted following a report that President-elect Donald Trump’s government efficiency team is exploring the creation of a free tax-filing app. Intuit, the maker of TurboTax, saw its stock price drop by 5%, marking its worst day since August 23. H&R Block’s stock price fell by 8%, its worst day since 2020.
The Department of Government Efficiency
Trump’s “Department of Government Efficiency” has held preliminary discussions about developing a free tax-filing app, as reported by The Washington Post. This advisory commission, led by billionaire Elon Musk and former Republican presidential candidate Vivek Ramaswamy, aims to reduce government spending. A government-created tax-filing app would directly compete with both H&R Block and TurboTax.
Industry Reaction
Intuit spokeswoman Tania Mercado emphasized the company’s long-standing call for simplifying the U.S. tax code, allowing individuals and small businesses to better understand their finances. H&R Block’s director of government relations, George Agurkis, expressed the company’s willingness to engage with the new administration and the Department of Government Efficiency on their ideas related to tax administration.
Existing Government Initiatives
The Biden administration has already implemented policies aimed at simplifying tax filing. In March, the IRS launched a pilot Direct File program in 12 states, enabling qualified taxpayers to file directly through a government portal. Additionally, the IRS offers free filing services through its Free File program for taxpayers with an adjusted gross income of $79,000 or less.
Transparency Concerns
While both Intuit and H&R Block offer free filing options, their records on transparency have been questionable. The Federal Trade Commission filed a complaint against H&R Block in February for deceptively marketing free filing products and deleting users’ in-progress tax data. Intuit agreed to pay $141 million in restitution for deceiving low-income Americans into paying for tax services that should have been free.
The potential introduction of a government-created tax-filing app raises questions about the future of tax filing and the role of private companies in this space. As the Department of Government Efficiency moves forward with its plans, it will be important to monitor the impact on the industry and taxpayers alike.
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