The underlying drivers of Porter’s Five forces are the root causes of profitability within the tax software industry, however; particular drivers in each force make the industry unique. Two barriers to entry, economies of scale and government policies, generate the majority of profitability in the industry. Firms with the largest market share have little unit cost after software development and implementation. These large economies of scale decrease unit costs for a firm, and increase start-up costs for entrants. Firms that have electronic servers of scale limit the ability for entrants to compete, as the costs to create and maintain nationwide servers are exorbitant. In addition, the changing governmental policies and initiatives for e-filing also increases barrier to entry. In recent years the IRS has eased the ability for residents to e-file, causing an annual increase of 6% in e-files over the last few years.[11] Additionally, companies that can access IRS servers, create software that incorporates the complexities of the IRS code, and produce software that updates annually, sustain a competitive advantage over new entrants. Concurrently, suppliers of computing and programming threaten forward integration due to the small size of software development projects compared to a firms overall business. Suppliers create the necessary technology to process tax returns making forward integration relatively cheap. Forward integration also provides additional revenue streams, such as when Intuit purchased TurboTax and Lacrete to increase Intuits product differentiation. [12] Conversely, buyer power is minimal. Buyers that integrate backwards and consume tax software companies do not profit directly because tax filing is a periodi...
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... risks added to GD’s line of business is its ability to forecast pricing to cover costs, its foreign contracts are subject to sovereign risk, R&D expenditures may not result in profits, and margins are considerably leveraged on the cost of materials.
As with all industries and audits there is audit risk and inherent risks, although GD has potential risks, these risks seem to be mitigated due to GD’s industry performance.
Works Cited
[11] More taxpayers filing online. La Voz. Mar 22 2011. more-taxpayers-are-filing-from-home> [12] A clear look at tax software. CPA Journal Online. Mar 22 2011. cpajournal/ 2008/508/infocus/p20.htm>
[13] Young, Anthony. It’s tax day: H&R Block vs. TurboTax. Media Works.com Mar 22 2011
The risk that the auditor or audit firm will suffer harm after the audit is completed, even though the audit report was correct,
In GM’s case they used a passive hedging policy in which they hedged 50% of all significant foreign exchange exposures arising from cash flows associated with ongoing business. Passive hedging is used by highly risk-averse companies that would like to be completely certain of their future cash flows through hedging a significant portion of their risk exposure. This can be achieved by locking in a specific price either through long- term contracts between a supplier and buyer, or through a derivatives contract such as futures, forward or swaps, which are available on most leading commodity exchanges. In the case of GM, they used forward contracts to hedge exposure arising within six months. GM’s longer-term strategy is that of options, which allows them to either buy or sell in the spot market without necessarily being committed to hedge contract. But such a method imposes a heavy hedging cost in the form of option premiums which have to be paid up front at the time of hedging.
The taxation that occurred on the colonies after French and Indian War, the British Monarchy and Parliament came to the conclusion that the colonist where going to be held accountable for this debt to the crown in defending the colonies during the war. Parliament’s response to this position was to pass several acts as their effort to collect money in which they believed to be their justified right to collect. The long and expensive war that defended the colonies gave the crown the impression of the colonies where now indebted to them, further giving Parliament the belief of having the right place a tax on the colonies under the Parliamentary Acts of 1764. Leading the colonist to berate the acts and cry out “no taxation without representation”
Intuit is a multinational corporation that provides products and services for both business and personal financial solutions. The Intuit name is well known throughout the Americas and continues to grow throughout the world, primarily due to their brand name products; such as TurboTax and QuickBooks, that are provided through multiple sources; direct from the manufacturer, resold by independent distributors or accountant, and in retail stores. The longstanding quality brand names combined with competitive cost has allowed Intuit to gain a 90% market share in the self-prepared tax and small to medium sized business finance solutions market (Lange, 2013). With such a large network of varied methods a consumer can purchase one of Intuit’s products or services pricing strategies may vary from one product to another, or from one seller to another.
Considering the service industry of preparing taxes, this essay will review how individual income taxes began, along with the industry growth and its value today. Specifically, we will review the corporation of H and R Block, its history, the products they offer, their marketing mix, their ranking in the industry, their stock value and annual revenues, and the contributions which they make back to society.
Imagine sitting down, doing your taxes and the sinking realization hits that you owe the IRS money. A thousand thoughts flash through your head wondering if they are going to seize your bank account, if you will lose your business or your home or even if you will wind up in jail. But, don't worry just yet, there are several tax relief options available to you.
Tax reform has undergone much debate in the political stratosphere recently. The tax system has been stigmatized because of a multitude of reasons that include corruption. Additionally, tax reform is a very complex issue. In addition, there has been an abundance of negotiations in Congress to pass some type of tax reform. Despite these talks, actual action has remained stagnant. This topic clearly reflects the collective action principle and the policy principle due to failed tax reform negotiations and the outcomes of various legislation.
This article was about the IRS warning people about scammers trying to scam them out of their money, this is a type of fraud because people are stealing millions of dollars from innocent people by tricking them into giving them money they don’t owe. This has been going on for a long time, as soon as someone found out how to make it believable they did it. This article talked about how the IRS scammers are so successful at stealing people’s money. They said they scare people, if I got a call from the IRS saying what the scammers call says I would be scared to. They said in total the scammers have got $23 million.
Intuit Inc. is an American software company that develops financial and tax preparation software and related services for small businesses, accountants and individuals. Intuit flagship products include Quicken, TurboTax, and QuickBooks. With these products Intuit main goal is to revolutionize the way people manage their personal finances, run small businesses and pay employees. One way to stay ahead of competition is to consistently be innovating. But how can Intuit revolutionize their company whilst keeping the simplicity of their products? The main problem faced by Intuit was incorporating user contributing systems. Because Intuit is a software company mostly developed for tax preparation, Intuit’s main task was to customize a user contribution system to one of their products called TurboTax. The purpose of using a user contribution system was to further simplify the taxing process. The user contribution system was called “Collective Intelligence Agent. (CIA)” CIA would help answer users’ questions by posting the question for other users to answer. But the “Collective Intelligent Agent” faced much skepticism. One main problem most had with this system was its reliability. Most users felt more comfortable if tax experts provided the answers rather than ordinary users. All in all if CIA could were functional, Intuit could potentially gain cost savings and lower service cost.
The federal and state governments provide the American citizens with all of the basic necessities within our communities and society that is taken for granted. Programs responsible for assistance in times of need, providing a quality standard of living, and maintaining the strongest military in the world costs incomprehensible amounts of money and could never exist without taxes from the American people. Taxes are payments made by individuals and businesses to support the government and its services. The constitution grants that congress “shall have the power to lay and collect taxes, duties, imposts, and excises and to pay the debts and provide for the common defense and general welfare of the people”. Taxes paid by Americans redistribute wealth towards their central governments to go towards creating and maintaining everything that makes the U.S. a leading industrialized nation.
Budgeting Assignment A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of a manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496)
A report on Value Added Tax Introduction Value Added Tax originated in France in 1954 and is under implementation in more than hundred countries. Value Added Tax is perceived by many as means to promote neutrality and uniformity of tax burden and to provide incentives for increased productivity and industrialization. The spread of VAT to the developed and the developing countries alike certainly, makes for an interesting study. Financial Times (London) too stressed the growing importance of VAT when it observed in its centennial review “The economic and technological changes of the second half of the century have made VAT the quintessential modern tax”. It will not be an exaggeration if one were to say that the emergence of the VAT as an important and elastic source of revenue over the last four decades is unparalleled in the history of taxation.
As many constituents and organizations look to the government for funding, the parties in office are seeking to gain political advantages for upcoming elections. One of the major issues representatives often address during campaigns to gain an advantage is the federal deficit. Since the deficit adds to the debt, which is over $14 trillion. “The federal debt exists as a result of federal government shortfalls, or deficit budgets in which the government's expenses exceed its revenues,” (Federal Debt, 2011). An important component of deficit is revenue. In order for individuals to analyze revenue, they must look at how the government receives its revenue.
Taxation has evolved throughout history as a method of funding government functions. The US government began taxing its people by imposing tariffs on certain items such as liquor, tobacco, sugar, and legal documents. Currently, there are taxes on almost every function. The IRS regulates income tax laws, central appraisal districts control property tax values, and there is a state sales tax on most purchases across the country. Taxes are difficult, if not impossible, to avoid. Benjamin Franklin stated “'in this world nothing can be said to be certain, except death and taxes” (Isaacson 463). Revenues from property taxes are used to fund public schools, hospitals, and local governments. I will discuss the history of property taxes and compare the Texas property tax rate to the rest of the country. Property taxes are more efficient than income tax and a better way for local governments to collect revenue from taxpayers.
The company recognizes that it is subject to both market and industry risks. We believe our risks are as follows, and we are addressing each as indicated.