The congressional delay on extending provisions of the Alternative Minimum Tax will likely not impede Intuit's ability to get its tax software out on time, according to senior vice president Brad Smith.
Smith, who is taking over as CEO of the Mountain View, Calif.-based company, made those comments at last week's Lehman Brothers Technology Conference.
While Congress is about 30 days behind its usual pace in what has become the annual extension of the AMT, the delay will probably do little other than potentially shift some revenue from Intuit's January quarter to its April quarter, he noted.
"This simply means it cuts into the amount of time the IRS and us have to turn it around. It's not cutting into the critical path," he said. "There is room to absorb this sort of delay."
There is a little more delay every year in fixing the AMT. The House and Senate have both passed bills to extend the AMT patch. However, there are important differences. The Senate version of the bill does not include offsets to make up for the loss in revenue, while the House version does.
Intuit's ability to get forms to professional preparers impacts a significant portion of the paid preparer market. During the last tax season, there were 100,000 copies of its ProSeries and Lacerte Software being used to prepare taxes.
Meanwhile, on the consumer side, Intuit will stick with last year's policy of providing the TurboTax Federal 1040 software for free.
"We learned that free works," said Smith.
The company found that 75 percent of the customers who got the free version, implemented in the middle of the tax season, had not been previous customers. Moreover, most of them purchased products, such as state forms or electronic filing. Smith said the giveaway had also proved effective in combating the efforts of lower-cost competitors.
Because of the success of providing the product for free, Intuit is going to be promoting the approach more heavily.
"We have doubled our investment in up-front marketing efforts," said Smith. He anticipated that Intuit would be able to get more users who have not previously used tax software, and produce more revenue from products such as state forms.
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