From the land of the free...or not.....income tax return

First came news that Treasury Secretary Tim Geithner used TurboTax, the nation's best selling income tax software to screw up tax returns that Congress grilled him about.

And now the company may have handed rival H&R Block Inc. unexpected ammunition in the two companies' fight for the allegiance of filing-from-home taxpayers - and their money - writes Fortune 500 marketing guru Rafael Grillo.

Grillo's take? Intuit, publisher of the TurboTax income tax preparation software that accounts for 80 percent of money consumers spend for those products, hiked prices early in the filing season without sweetening the deal with enough new features to mollify consumers. Block, in contrast, basically held the line on prices and added features to its TaxCut software.

Nobody likes paying income taxes much, especially in a recession, so Block this year may end up knifing off a big slab of Turbo Tax's four-times-larger market share, all because of a few dollars price difference Grillo says.

Early season filers noticed enough of a difference to swing about 4 percent of sales through December into Block's coffers, trend watchers report. But December sales are so small and so early in the season that even Pennsylvania groundhogs run up better forecasting records.

TurboTax understandibly disagrees with Grillo's assessment. The company already has changed those December pricing policies and only about 25 percent of its expected customers
will shell out more money to file, because they previously hadn't filed electroinically, Bob Meighan, Turbo Tax's vice president, wrote in a reply to Grillo's post.

"Whether your return is simple, or complex, TurboTax has a solution that's right for you, from free on up," Meighan wrote.

Block, meantime, continues to bet it will win more customers by providing more value at competitive prices, said spokeswoman Denise Sposato.

Ultimately, "we're a tax company and they are not," Sposato said. "They are a software company.