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Crypto Traders Had Rough Tax Season, Intuit CEO Says

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(Bloomberg) -- Intuit Inc. Chief Executive Officer Sasan Goodarzi said his predictions that cryptocurrency investors would be hit with surprise obligations this tax season came true.

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Many new retail stock and crypto investors “have piles of documents that include all of their trading,” Goodarzi said in an interview. “Not being able to make heads or tails out of ‘What does this mean to my taxes’ -- so it creates fear, uncertainty and doubt.”

Intuit, the maker of TurboTax and other consumer finance software, estimated the number of customers filing crypto transactions with their tax returns will more than quadruple this fiscal year compared with a year earlier.

“I think most of these folks are even in a bigger hurt now -- last year, it was all the money they may have made and not really understanding the implications,” Goodarzi said Tuesday after Intuit’s earnings were announced. “Now some of it could be the other impact -- how much they’re losing.”

Goodarzi said the company will be working to educate users throughout the year on tax implications of investing.

Intuit reported revenue and earnings that topped analysts’ estimates for the fiscal third quarter, which ended April 30 and is typically the firm’s biggest due to tax filing deadlines. Revenue jumped 35% to $5.6 billion, and the software company increased its sales and profit forecast for the fiscal year.

Much of the growth comes from two recent acquisition. Intuit bought email marketing firm Mailchimp last year for $12 billion, and personal finance website Credit Karma in 2020 for $7.1 billion. The two products are now among the fastest-growing in Intuit’s portfolio. Credit Karma revenue increased a record 48% in the quarter.

Intuit shares climbed about 3.5% in extended trading after closing at $358.97. The stock has dropped 44% this year amid a wider selloff in software companies.

Weighing on Intuit’s results was a $141 million payment to settle a lawsuit from state attorneys general across the US alleging the company duped users into paying for TurboTax when they were legally eligible for free tax filing services.

During a conference call Tuesday, Chief Financial Officer Michelle Clatterbuck said the company was pleased to put the issue behind them. But a separate U.S. Federal Trade Commission lawsuit targeting the company’s TurboTax advertising practices remains open.

Goodarzi called the FTC’s complaint “meritless,” particularly since their allegations overlap with the state attorneys general lawsuit the company has settled. “We’re going to fight them,” he said.

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