Why Intuit, HR Block Shares Are Trading Lower

Intuit Inc INTU and H&R Block Inc HRB shares are moving lower Monday following news the Biden administration is considering creating a government-run tax preparation alternative

What Happened: According to a Wall Street Journal report, the IRS is expected to unveil a potential Direct File system this week that the Biden administration will then review in order to determine whether it will be pursued for implementation. 

"This is a service that I think the government ought to provide. 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," former Treasury official Kitty Richards reportedly said. 

The report indicates that Intuit's TurboTax and H&R Block believe this is the first step toward a bigger threat in which the IRS could use employer information to prepare a first draft of tax returns for taxpayers.

Intuit argues that a direct-to-IRS system would not be free, instead taxpayers would be charged to build the system and keep it running.

Barclays analyst Raimo Lenschow maintained Intuit with an Overweight rating and raised the price target from $465 to $495 Monday morning.

See Also: Why C3 AI Stock Is Moving Higher Monday

INTU, HRB Price Action: At publication time, Intuit shares were down 2.43% at $417.22 and H&R Block shares were down 4.93% at $30.46, according to Benzinga Pro.

Photo: Steve Buissinne from Pixabay.

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