Intuit Corp has acquired SecureTax.com, a rival online tax preparation firm based in Rome, Georgia. Terms were not disclosed. Intuit says the acquisition will give it economies of scales and a new set of potential customers who have already shown willing to do business on the internet. Intuit hopes to attract them to its other online financial services, including internet-based mortgage and insurance businesses.
Intuit first introduced web-based tax preparation services in the US in 1997, and last year over 240,000 Federal tax returns and 148,000 state tax returns were filed using its WebTurboTax service. That was a ten-fold increase over the previous year. The SecureTax service was cheaper than Intuit’s service, and was also being offered to accountants for tax preparation. The servers hosting both the Intuit and SecureTax.com sites suffered downtime during the first two weeks in April, when demand was at its heaviest (CI No 3,639). Commentators believed that peak loads were simply too heavy for the technology to cope with.
The acquisition has been approved by the boards of directors of both companies and a majority of SecureTax.com shareholders, and closed on Aug. 9. All of SecureTax.com’s operations will be folded into Intuit’s tax division, based in San Diego, California. Intuit appears to have closed down SecureTax’s site immediately.
The IRS predicts that by the year 2002 half of all tax returns will be filed electronically and hopes for 80% electronic returns by 2007. Congress has mandated that by the year 2002 all tax returns prepared by computer must be filed electronically.
