The California-based Intuit Inc. currently dominates the market in the do-it-yourself tax preparation and filing business. Intuit made 23 million sales of its TurboTax software in the last tax season alone.

To combat Intuit's dominance, traditional tax filing giant H&R Block had a plan to acquire a company called 2SS Holdings Inc. 2SS Holdings is the maker of a tax preparation software package called TaxACT. H&R Block's bid was for more than $287 million. TaxAct made around five million sales of its software during the last tax season. Now, though, H&R Block has dropped its acquisition plan after a setback in federal court.

San Diego mergers and acquisitions attorneys noted from news reports that a federal judge recently ruled that H&R Block's acquisition of 2SS Holdings would violate antitrust laws. A spokesperson for H&R Block said the company was disappointed in the decision, but did not plan to appeal it.

The judge ruled on October first that the deal would have left just two major providers of tax preparation software providers in the market. H&R Block as its own program, called "At Home," that they planned to combine with TaxACT. The current H&R Block software sold around 6.7 million units last tax season. Once At Home and TaxACT would have been combined, the judge determined that H&R Block and Intuit together would control over 90 percent of the tax preparation software market.

Source: Washington Post "H&R Block drops attempt to acquire TaxACT after federal court nixes bid on antitrust grounds" Nov. 15, 2011