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Sunday, May 26, 2024 | Back issues
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Judge Let Tax Preparers Rely on Survey for Court

(CN) - A federal judge has unsealed a 3-month-old decision in the government's lawsuit to stop the proposed merger of H&R Block and the makers of TaxACT, a leading digital do-it-yourself tax preparation software provider.

The Sept. 6 decision refuses to exclude the tax preparers' evidence of an email survey that they commissioned. Parts of the defendants' expert opinion relies on that survey, and that survey can stay intact as well, U.S. District Judge Beryl Howell ruled in Washington.

Though the government claimed that the survey uses inferior methodology, Howell said such "defects do not undermine the survey and the expert's reliance on it so overwhelmingly that they render the survey wholly irrelevant or unreliable - and therefore inadmissible."

Howell unsealed the 15-page decision on Dec. 8.

In a May 2011 lawsuit, the Justice Department said H&R Block's acquisition of TA IX's subsidiary 2SS Holdings would lessen competition in a growing market, causing higher prices and reduced innovation.

About a quarter of the 140 million Americans who filed taxes last year did so using digital products, according to the complaint.

H&R Block and TA IX represent the second and third largest providers. Intuit, which makes Turbo Tax, is the biggest and is not a party to the government's lawsuit.

In an October 2010 transaction valued at $287.5 million, H&R Block agreed to buy 2SS Holdings TA IX, which created TaxACT and calls itself a "maverick" in the business, according to the complaint. The company started out by offering the same do-it-yourself (DIY) products for free or significantly lower prices.

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