Intuit CEO Sasan Goodarzi attacked the Biden administration’s planned rollout of a free government-run online tax filing system, saying it will come at a substantial cost to taxpayers in a Tuesday earnings call.
The Internal Revenue Service (IRS) announced it would be rolling out a pilot program for a government-run online tax filing system in 2024, marking a potential step toward a full-scale launch that would compete with tax preparation, Reuters reported. The system is “actually not free — this is going to cost taxpayers billions of dollars,” Goodarzi said on the call.
TurboTax accounted for 31% of Intuit’s sales, or $3.9 billion, in the 2020-2021 fiscal year, according to Yahoo Finance. The tax system would cost between $64 million and $249 million per year to establish and run, according to an IRS feasibility report published May 16. (RELATED: EXCLUSIVE: Sen. Tim Scott Introduces Legislation Redirecting $15 Billion From IRS To Border Security)
Intuit owns TurboTax, QuickBooks, Mint, Credit Karma and Mailchimp.
Democrats and consumer advocates have been pressing the IRS to provide online tax filing services for no charge on its website, specifically for individuals with uncomplicated returns, according to The Wall Street Journal. The program’s proponents argue tax filing companies charge average Americans for a service that should be free.
President Joe Biden signed the Inflation Reduction Act into law in August 2022, which mandated the IRS look into creating a government-run tax filing system.
A 2022 taxpayer experience survey found that 73% of taxpayers would be “very interested” or “somewhat interested” in utilizing “a free IRS-provided online tool to prepare and file their taxes,” according to the feasibility report. Almost 70% of taxpayers who use commercial software like TurboTax would be “very likely” or “somewhat likely” to switch to the free IRS tool.
“We don’t expect this initiative to gain much traction given a number of issues, including lack of government track record in creating user-friendly software, conflict of interest (no government incentive to maximize refunds), consumer trust, no state tax filing, and wide availability of free options from commercial vendors, including Intuit,” Financial services company Jefferies analyst Brent Thill stated in a client note recently, according to Yahoo Finance.
The IRS directed the Daily Caller News Foundation to a letter addressed to Treasury Secretary Janet Yellen on the feasibility of the tax filing system.
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