INTU Stock Alert: Why Intuit Is Down Today

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  • Intuit (INTU) stock is falling alongside talk the government could create its own tax prep software.
  • This would see the IRS offering the service for free.
  • The company worries this could cause its revenue to drop.
INTU Stock - INTU Stock Alert: Why Intuit Is Down Today

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Intuit (NASDAQ:INTU) stock is on the move Monday as investors react to talk of a new government-run tax preparation service.

President Joe Biden’s administration is considering creating a tax preparation service that would assist citizens with filings their taxes with the IRS. This would undercut private companies offering similar services, such as Intuit’s TurboTax program.

The IRS is currently planning to submit a proposal for its own tax-filing system. If it gets approval from the Biden Administration, the agency would be able to move forward with the creation of the tax prep service.

Derrick Plummer, a spokesman for Intuit, said the following about the IRS’ tax prep plans to The Wall Street Journal:

“A direct-to-IRS e-file system will be redundant, and it will not be free—not free to build, not free to operate and not free for taxpayers.”

On the flip side of that, former Treasury official and tax expert Kitty Richards said this about the idea to WSJ:

“It’s problematic that we instead provide it through these private corporations that prey on people and extract profits from taxpayers that are just fulfilling that civic duty.”

What This Could Mean for INTU Stock

If the IRS does create its own tax prep service, it could be damaging to INTU stock. The company may see a loss in revenue as customers make use of the free option offered by the IRS over its own.

Intuit does offer some free tax filing services, but not all types of tax forms are covered under it. That results in many middle-class citizens being unable to use it and having to pay for more premium services.

INTU stock is down 1.6% as of Monday morning.

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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/05/intu-stock-alert-why-intuit-is-down-today/.

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