Representatives from the Department of Justice said it was requiring Credit Karma Tax to be sold to Square in order to protect competition in the digital do-it-yourself tax arena. Credit Karma’s tax software is free and is viewed as direct competition to Intuit’s popular TurboTax product.
“Intuit’s TurboTax has long led the market for digital do-it-yourself tax filing services, but disruptive competition from Credit Karma Tax has brought substantial benefits to American taxpayers,” said Assistant Attorney General Makan Delrahim of the justice department’s antitrust division. “Today’s divestiture to Square, another highly successful and disruptive fintech company, ensures that taxpayers will continue to both benefit from this competition and benefit from new innovative financial service offerings from both Intuit and Square.”
Intuit is set to purchase Credit Karma for $7.1 billion. According to information from Square, Credit Karma’s tax service will continue to be available for no charge through its Cash App.
“We created Cash App to provide more access to the masses of people left out of the financial system and are constantly looking for ways to redefine our customers’ relationship with money by making it more relatable, instantly available, and universally accessible,” said Brian Grassadonia, Cash App Lead. “That’s why we’re thrilled to bring this easy-to-use tax product to customers as we continue to build out the suite of tools Cash App offers. With this acquisition, we believe Cash App will be able to ease customers’ burden of preparing taxes every year.”
FROM TWITTER
ICoinTime @ICoinTime1 Nov 26
"According to Wednesday's announcement and a series of documents, the U.S. Department of Justice is calling shenanigans on Intuit's ambitions, at least to some extent. https://en.icointime.com/post/345107723658.html"
Intuit, who also makes TurboTax, QuickBooks, and Mint, said Credit Karma’s tax product sale to Square means its own acquisition of the rest of Credit Karma is one step closer to finalizing. To that end, they have entered into a consent decree with the U.S. Department of Justice and an Assurance of Discontinuance with the New York State Attorney General as part of the acquisition process.
“We are very excited to reach this important milestone today. This brings us one step closer to transforming personal finance by making it simpler for consumers to find the right financial products, put more money in their pockets, and provide financial expertise and advice,” said Sasan Goodarzi, CEO of Intuit. “We are pleased to have cleared this necessary regulatory review with DOJ and appreciate their careful consideration of this transaction. Consumers will continue to benefit from the Credit Karma Tax product as part of Square.”
According to Square, self-preparation of taxes is a growing trend. Statistics from the IRS cited by the company show that in 2020, close to half of tax filers took care of their own taxes. That amounts to 80 million people, it notes.
