Taxpayers, Trends and the Worldwide Web

transcript

Taxpayers, Trends, and the World Wide Web

Larry WolfeSenior Vice PresidentIntuit Inc.

Agenda

Waves of Technology Will Taxpayers Adopt? Roles Taming the Paper Tigers Public/Private Partnership Looking Forward

The Creation of Empires

Internal Combustion Engine

Semiconductor

Internet

Auto industry Oil industry Fast food industry

Consumer electronics Enterprise software industry PC industry

Electronic Finance Many more to come . . .

Internet Impact: There are waves…and then there is a tsunami

‘22 ‘30 ‘38 ‘46 ‘54 ‘62 ‘70 ‘78 ‘86 ‘94 ‘02

Radio TVCable Internet

Source: Morgan Stanley.

Years to reach 50 million users

38 13 10 5

5Source: Morgan Stanley Equity Research

Insurance & Fin Srvcs

Computer Soft/Hardware

Collectibles

Music/Video

Flowers/Gifts

Consumer Electronics/Appliances

Office Products

General Sporting Goods

Tools/Home Repair

Home Furnishings

Cigars (it’s a 90s thing…)

Internet Opportunities for Various Product and Service Categories

Internet Business OpportunityInternet Business Opportunity

Waves of Technology

InstitutionInstitution Enterprise Computing

Automate the Back Office

CitizenCitizen Personal Computing

Automate the Customer

Connected Computing

Automate the Communication

InstitutionsBusinesses

The Paper Chase

Consumers

Phase One: the Computer

Businesses Institutions

Consumers

Phase Two: the Internet

Businesses Institutions

Consumers

Electronic Finance of the Future Will Be:

Connected

Interconnected

Delivered via the Net

Interconnecting key partsof the financial picture

Meaning

Goal…save time, save money

Internet Trends

Consolidating Force Search / News / Sports / Books

High Fixed / Low Variable Costs Volume Players Win

Requirements Size (Relative Scale) Speed (Time to Market)

Will Taxpayers Adopt?

Wave 1: Desktop Software Personal finance Tax preparation Small Business

Wave 2: Web-based Software Credit Card Usage on the Net Financial Data on the Net Financial Activity on the Net

Access and Means

Taxpayer Voluntary compliance

Return self prepared Return professionally prepared

Files tax returnElectronic, mail, telephone

Pays any tax dueVia paper or electronically

Technology Shifts:

Paper to PC to Internet

Recent growth of e-file

Paper to e-pay

Professional Preparers Gathers data from

taxpayer Prepare tax return

for taxpayer File tax return Provide tax advice Provide support

Software Industry Technology investment &

innovation Tax preparation tools

Gathers data from taxpayer

Calculate, review return Access to tax help and

publications Tools for filing return Provide tax advice Provide support

Technology Shifts: Service Bureaus to desktop to Internet

Government Collect revenues for public treasury Develop and oversee tax regulations Audit and enforcement Provide information and services to citizens

Technology Shifts: Paper and Telephone to Electronic Information Services over the Internet

How Will This Succeed? Partnering.

Citizen

BusinessesGovernment

FinancialInstitutions

Technology

The Old Days

The New Days

Public/Private Partnerships

Government and Industry working together in Public/Private Partnership Cooperation, not competition

Common goals Mutual Commitment

The Consumer Finance World

Banking Taxes

Mortgages

Investments

FinancialInformation/News

Insurance

Banking

Mortgages

Investments

FinancialInformation/News

The Electronic Consumer Finance World

Insurance

The Income Tax Process

Checkbook

Taxpayer

States

Tax Preparer

Mutual FundsBrokerage House

Employers

The Electronic Income Tax Process

TaxpayerIRS

States

Employers

Mutual FundsBrokerage House

ServerWebTurboTax

Tax Preparer

E-file Server

Electronic Returns Filed

TY94 TY95 TY96 TY97 TY98

Electronic Returns Filed

The Small Business World

Small Business States

Customers

Suppliers

DistributionChannel

U.S. Gov’t

Employees

Accountants

States

Customers

Suppliers

DistributionChannel

U.S. Gov’t

Employees

Accountants

The Electronic Small Business World

Small Business

Lower costTaxpayer and government

Real-time information Instant record updates Zero data entry, improved accuracy

Taxpayer and government Taxpayer controls finances easily

Individual or business

Why Interconnected Finance?

Benefit

BenefitBenefitBenefit

Benefit

Getting to E-File Goals

Eliminate ALL barriers Allow all returns to be e-filed Eliminate all paper requirements Enable electronic payments (debit & credit) Squash the perception of higher audit risk Implement electronic postmarks Simplify ERO signup process

Simplify application process Treat all preparers equally

Be careful about digital signatures

Getting to E-File Goals

Provide incentives for taxpayers and tax preparers Warehouse electronic payments

Preferably until after April 15 Provide online customer service Reduce audit period for e-filed returns Enable electronic correspondence Allow direct account access and enhanced

status information Don’t speed up paper processing

Where Is Industry Today?

As a result of innovation and competition, private industry has: 12 million individuals using tax software 200,000+ professionals using tax software Made tax preparation easier and faster Reduced the costs of tax preparation Simplified e-filing Started to make automated tax returns real

Where Is Government Today?

Technology is enabling development of On-line information services for citizens On-line customer service capabilities

Web-knowledgebaseAccount information

On-line forms and publications Open model for electronic filing A host of internal services

(e.g., audit and compliance)

Where Should We Be Going?

Public/Private partnerships Industry can and will innovate Government can and should facilitate

End result…..everybody wins Taxpayers, Government, and Industry

Competition results in better productsCompetition results in lower pricesMore returns are e-prepared and e-filed

Example: Quicken Tax Freedom Project Donated Web-based tax preparation and e-file

services No charge to taxpayer or government

Partnership Recommendations: Public Awareness and Education Campaigns Agencies educating taxpayers about no-charge

preparation and e-file services Reference all providers of services

Public/Private Partnership