Shares of tax preparation companies H&R Block and Intuit experienced significant declines on Tuesday following a report from The Washington Post indicating that Elon Musk’s Department of Government Efficiency (DOGE) is considering the development of a free mobile tax-filing application.
H&R Block’s stock plummeted by as much as 9%, while Intuit, the parent company of TurboTax, saw its shares drop by approximately 7%. The proposed app aims to enable Americans to file their taxes at no cost, potentially disrupting the established market dominated by these companies.
According to sources familiar with the discussions, President-elect Donald Trump’s DOGE, led by Musk and entrepreneur Vivek Ramaswamy, is exploring ways to simplify the tax filing process. A recent post on X (formerly Twitter) from the DOGE account emphasized the complexity of the U.S. tax code, which has expanded nearly 1,000% since 1955, stating, “This must be simplified.”
H&R Block generates nearly $4 billion annually from its tax services, while approximately one-third of Intuit’s revenue—around $5 billion—comes from TurboTax. This situation is not unprecedented; previous government initiatives aimed at providing free tax filing services have also impacted the stock performance of these companies. For instance, the Biden administration launched a pilot program through the IRS allowing taxpayers to file online for free as part of the Inflation Reduction Act.
Market analysts are divided regarding the implications of government involvement in tax preparation. A note from Jefferies described the sell-off in Intuit’s stock as “unwarranted,” suggesting that a tax filing app from DOGE is unlikely to be prioritized among other initiatives. Conversely, Bloomberg Intelligence analyst Andrew Silverman warned that a government-backed tax filing service could pose a threat to revenues for H&R Block and Intuit.
As discussions about the potential app continue, both companies are keenly aware of their competitive landscape. H&R Block’s Director of Government Relations expressed a willingness to engage with DOGE on effective tax management proposals. Meanwhile, an Intuit representative reiterated the company’s long-standing advocacy for simplifying the U.S. tax code.
The evolving dynamics in this sector highlight ongoing tensions between private tax preparation firms and government efforts to streamline tax filing processes for Americans.
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