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If Intuit's strategy is to spend billions to kill free tax products, then that would suggest that there's a huge reward for the next organization that can repli

If Intuit's strategy is to spend billions to kill free tax products, then that would suggest that there's a huge reward for the next organization that can replicate Credit Karma's success. Is it really that difficult to build tax software?

colejohnson66 7y ago
It depends. There’s 1 federal return (albeit with many different forms) and 50 states (each with their own system). TurboTax, H&R Block, and CreditKarma keep track of all the changes for you. And if you make a mistake in your software and the user gets audited, you can bet you’ll be sued by the user eventually.
- selectodude 7y ago
  And all of the documents that you need are free online. I can’t imagine there’s much more to it than a time investment.
  - manquer 7y ago
    It is recurring investment though, every year tax codes keep changing, you need to keep it all updated . That’s an enormous cost and relatively unique to this kind of application.
    - toomuchtodo 7y ago
      I suppose the solution is to just keep donating to and enabling candidates running for federal office who support providing the IRS with the legislation and technology support to do their job (streamline tax processing) and break Intuit’s pseudo monopoly. On the plus side, it’s a lot harder to buy someone with morals than a VC backed startup.
    - deleted 7y ago
      [deleted]
    - bmm6o 7y ago
      I don't know about "enormous cost"... if we're assuming that you can handle taxes this year, the changes to support next year have to be comparatively minor. It's definitely true that you need to keep current or the value of your service crashes to zero. But nobody is arguing that governments shouldn't update their tax codes.
- nkozyra 7y ago
  Minor point, but not all fifty states collect income tax.
  - astura 7y ago
    And some non-state entities have income tax (DC, Puerto Rico, Guam, etc.)
- throwaway2048 7y ago
  I doubt all this costs 7 billion dollars
Ozzie_osman 7y ago
Yes. Partly due to Intuit (and others) spending money to keep tax filing complex. You of course also have to build out distribution channels to acquire users which is also very costly. EDIT: Changed "keep the tax code complex" to "keep tax filing complex", since someone asked for (and I couldn't provide) evidence of keeping the tax code itself complex.
- harryh 7y ago
  Can you point to a specific rule in the tax code that is overly complex because of intuit lobbying and not because of the interests of one of the two main political parties in the US? I cannot.
  - wombat-man 7y ago
    Well they lobbied to stop the IRS from creating a free online tax thing. https://www.propublica.org/article/congress-is-about-to-ban-the-government-from-offering-free-online-tax-filing-thank-turbotax https://www.propublica.org/article/congress-is-about-to-ban-... It's slightly different I guess. But since a lot of the paperwork you have to feed into turbotax is already known to the IRS, it's possible the IRS having their own product would have really simplified things. Then again, gov websites are pretty hit and miss.
    - briandear 7y ago
      However, does the government have an incentive to help you find every deduction? Or course not.
      - stonogo 7y ago
        The free-file option was for people taking the standard deduction.
      - maxerickson 7y ago
        What's the deal with this complaint? Literally no one is proposing that the tax system be changed so that you get a bill that you have to pay, every proposal is that the government should send you forms prepared with the information they have, and you can file different forms if have additional information. You gotta complain about it being unfair for people in cash businesses to get that information or something, the lack of incentive alignment is not even close to a real problem with the idea.
thrwn_frthr_awy 7y ago
Good April was a competing product years ago that was acquired by Intuit. They did a lot of of the early tax returns manually for their users under the covers.
BurningFrog 7y ago
This is an old Milton Friedman argument. I think it holds up. Think of it as announcing a $7B X Price for anyone building this again.
deleted 7y ago
[deleted]

colejohnson66 7y ago

It depends. There’s 1 federal return (albeit with many different forms) and 50 states (each with their own system). TurboTax, H&R Block, and CreditKarma keep track of all the changes for you. And if you make a mistake in your software and the user gets audited, you can bet you’ll be sued by the user eventually.

selectodude 7y ago
And all of the documents that you need are free online. I can’t imagine there’s much more to it than a time investment.
- manquer 7y ago
  It is recurring investment though, every year tax codes keep changing, you need to keep it all updated . That’s an enormous cost and relatively unique to this kind of application.
  - toomuchtodo 7y ago
    I suppose the solution is to just keep donating to and enabling candidates running for federal office who support providing the IRS with the legislation and technology support to do their job (streamline tax processing) and break Intuit’s pseudo monopoly. On the plus side, it’s a lot harder to buy someone with morals than a VC backed startup.
  - deleted 7y ago
    [deleted]
  - bmm6o 7y ago
    I don't know about "enormous cost"... if we're assuming that you can handle taxes this year, the changes to support next year have to be comparatively minor. It's definitely true that you need to keep current or the value of your service crashes to zero. But nobody is arguing that governments shouldn't update their tax codes.
nkozyra 7y ago
Minor point, but not all fifty states collect income tax.
- astura 7y ago
  And some non-state entities have income tax (DC, Puerto Rico, Guam, etc.)
throwaway2048 7y ago
I doubt all this costs 7 billion dollars

Ozzie_osman 7y ago

Yes. Partly due to Intuit (and others) spending money to keep tax filing complex. You of course also have to build out distribution channels to acquire users which is also very costly. EDIT: Changed "keep the tax code complex" to "keep tax filing complex", since someone asked for (and I couldn't provide) evidence of keeping the tax code itself complex.

harryh 7y ago
Can you point to a specific rule in the tax code that is overly complex because of intuit lobbying and not because of the interests of one of the two main political parties in the US? I cannot.
- wombat-man 7y ago
  Well they lobbied to stop the IRS from creating a free online tax thing. https://www.propublica.org/article/congress-is-about-to-ban-the-government-from-offering-free-online-tax-filing-thank-turbotax https://www.propublica.org/article/congress-is-about-to-ban-... It's slightly different I guess. But since a lot of the paperwork you have to feed into turbotax is already known to the IRS, it's possible the IRS having their own product would have really simplified things. Then again, gov websites are pretty hit and miss.
  - briandear 7y ago
    However, does the government have an incentive to help you find every deduction? Or course not.
    - stonogo 7y ago
      The free-file option was for people taking the standard deduction.
    - maxerickson 7y ago
      What's the deal with this complaint? Literally no one is proposing that the tax system be changed so that you get a bill that you have to pay, every proposal is that the government should send you forms prepared with the information they have, and you can file different forms if have additional information. You gotta complain about it being unfair for people in cash businesses to get that information or something, the lack of incentive alignment is not even close to a real problem with the idea.

thrwn_frthr_awy 7y ago

Good April was a competing product years ago that was acquired by Intuit. They did a lot of of the early tax returns manually for their users under the covers.

BurningFrog 7y ago

This is an old Milton Friedman argument. I think it holds up. Think of it as announcing a $7B X Price for anyone building this again.

deleted 7y ago

[deleted]