H&R Block (HRB) shares plummet while the The Internal Revenue Service (IRS) is set to release a report this week about its plans to offer free online tax filing on its website.
The idea of allowing taxpayers to electronically file directly with the agency at no cost was part of the $80 billion set aside for IRS upgrades in the Tax Act. reduction in inflation from last year. The agency noted that its current FreeFile tax filing program, which requires a third-party tax preparer, was used by only 3% of taxpayers last year. Additionally, he estimated that the average cost for Americans to file taxes in 2023 was $250.
After the report was published, the Biden administration will determine whether to move forward with the proposal.
Tax preparation firms oppose decision
H&R Block and TurboTax software provider Intuit (INTU) oppose this plan. “It would be a conflict of interest if the agency responsible for collecting, investigating and enforcing taxes was also a tax preparer,” the CEO of 39;Intuit, Sasan Goodarzi.
Shares of H&R Block are down almost 4%, while those of Intuit slip 1.5%. Shares of the former are down 14% year-to-date, while those of the latter are up 8% over the same period.