H&R Block and Intuit shares fell Tuesday after the Washington Post reported that President-elect Donald Trump Ministry of Government Efficiencywhich is run by billionaires Elon Musk and Vivek Ramaswamy, is considering developing a free app to help people file their taxes.
The publication quoted two people, who spoke on condition of anonymity, as reporting that the new administration’s DOGE leaders were discussing the idea of creating a mobile app to file income tax returns with the Internal Revenue Service.
H&R Block shares fell 8.2%, while Intuit lost 5.1% on Tuesday. As dominant players in tax preparation, H&R Block and Intuit, the maker of TurboTax, generate billions in annual revenue by offering online and in-person services.
The Biden administration rolled out a pilot Direct File program through the IRS in twelve states in March. Allows qualified taxpayers to file directly through a federal portal. Additionally, the IRS offers services through the Free File program for those who earned an adjusted gross income of $79,000 or less.
More than 100,000 taxpayers used the new Direct File program to file their tax returns this year. According to the Ministry of Finance, this was the first time that the system was put into use.
The DOGE, which has been tasked by Trump to cut government spending and limit federal regulations, criticized the complexity of the U.S. tax code in a Nov. 16 post on X, Musk’s social media service.
“In 1955, there were fewer than 1.5 million words in the U.S. tax code. Today there are more than 16 million words,” the X account said. “Because of this complexity, Americans collectively spend 6.5 billion hours each year preparing and filing their taxes.”
Intuit and H&R Block also have free archiving options.
That said, earlier this year the Federal Trade Commission banned Intuit from advertising its popular TurboTax product as free most people have to pay to use it. The FTC filed an administrative complaint against H&R Block in February, saying it had already marketed its tax preparation products as free the data deleted as a way to pressure them to pay for more expensive services. Both companies said they would appeal.
