Yesterday, A U.S. District Judge ruled that H&R Block Inc. could not purchase TaxAct (2SS Holdings Inc.) . Block and TaxAct are the number 2 and number 3 sellers of on-line tax preparation, and the court ruled that if the transaction went through, then it would reduce competition in this market.
The Justice Department had alleged that the deal would lead to higher prices for consumers.
Now the question is: what will TaxAct (2SS Holdings) do? Will they try to find another buyer? They won't be able to sell to Intuit (who is the number 1 seller of on-line tax preparation). So can they sell to #4? Or are they relegated to having to run the business themselves.
Only time will tell.
Of course, if some others in the on-line market start catching up to the big three, then all this could change down the road. At 1040.com ( http://www.1040.com/ ), we are using the tax engine behind Drake Software to provide e-Filing sites for all of our Professional Tax Preparers. And we even have options so that Tax Preparers can white-label the Drake Software Tax engine.
So let's all get together and break into this market. The e-Filing website is included free for Tax Preparers that use our full package. http://drakesoftware.com/site/Products/PricingPurchasing.aspx