(Bloomberg) — Shares of Intuit Inc. and H&R Block Inc. fell Tuesday after the Washington Post reported that leaders of President-elect Donald Trump’s Department of Government Efficiency were discussing creating a new way for Americans to file their taxes.
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H&R Block fell as much as 8.7%, falling to its lowest level since August, while Intuit fell as much as 6.8%, wiping out much of the progress made in the aftermath of the election.
Intuit, the maker of TurboTax, and H&R Block dominate the U.S. tax preparation industry, earning billions of dollars a year providing digital and personal services. The discussions follow the rollout of a pilot program that will allow taxpayers to file their returns online for free as part of the Biden administration’s Inflation Reduction Act.
The Washington Post report, which cited people familiar with the conversations, said the “DOGE” panel discussed creating a mobile app that would allow Americans to file taxes for free. A message from ‘DOGE’ stated that the tax code had become too complex and ‘needed to be simplified’.
In addition, Bloomberg Intelligence wrote that an IRS entry into the tax preparation industry “could theoretically jeopardize the revenues of H&R Block, Jackson Hewitt and Intuit,” with nearly a third of Intuit’s revenue at risk. However, analyst Andrew Silverman believes that the “Direct File” tool “will not compete successfully” because the IRS “cannot devote the resources to it and is ill-equipped to create or maintain the software needed to provide taxpayers with to speak.”
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