The Embedded Tax Revolution: Ben Borodach, CEO of april, on Building Tax Infrastructure from Scratch

I don’t know anyone who enjoys filing their taxes. It is something we begrudgingly do every April, or earlier for the well-organized, and it is usually a somewhat painful exercise. What if filing your taxes was easy, taking less than 30 minutes? What if tax planning wasn’t a once-a-year chore but an embedded feature in your banking app, payroll platform, or investment account?

In this episode, I sit down with Ben Borodach, founder and CEO of april, the first company to build a nationally licensed tax engine in over 15 years. Ben shares how april is transforming tax from an annual burden into real-time financial intelligence, partnering with banks, fintechs, and payroll platforms to embed tax services directly into the financial tools Americans already use. We discuss the massive technical challenge of building tax infrastructure from scratch, why embedded tax makes sense for financial institutions, and how bringing tax decisions to the point of transaction, whether selling stock, adjusting payroll withholding, or buying a home, can fundamentally change how people manage their financial lives.

In this podcast you will learn:

• How he came to the idea of building a fintech company focused on tax.
• How april was incubated inside Team8.
• Why they decided to create an embedded tax solution rather than go direct to consumer.
• What their product offering does.
• How they are helping consumers to think about taxes beyond once a year.
• The three categories of companies they are focused on.
• Why banks should be offering tax services to their customers.
• Why being integrated into the banking cores is not a high priority right now.
• How april is different to the big tax providers, TurboTax and H&R Block.
• How their customers present the tax offerings.
• What it means to be a nationally licensed e-file provider.
• How they integrate with the IRS and the state tax agencies.
• How they are leveraging the growth of embedded finance.
• What is involved from a technology perspective to integrate with april.
• How he thinks about tax policy, as a tax infrastructure company.
• Ben’s vision for april.

Read a transcription of our conversation below.

FINTECH ONE-ON-ONE PODCAST NO. 567: Ben Borodach

Ben Borodach

So when we say that we’re embedding tax in every financial decision, what that means to us is that inside your primary financial relationship, which could be your bank account, it could be a small business platform, it could even be your payroll firm, we believe that you should be able to do your taxes there, principally. So we have a full suite of services where you can either do self-prep or you could actually drop off your documents and have a full CPA style experience embedded where you already are managing your money, except that we can connect it.

We can offer this service cheaper and faster. So, last year, the median time to file an April self-prep was about 25 minutes, a little bit less than that. The average time to file according to the IRS is like up to eight hours.

Peter Renton

This is the Fintech One-on-One Podcast, the show for Fintech enthusiasts looking to better understand the leaders shaping Fintech and banking today. My name is Peter Renton and since 2013, I’ve been conducting in-depth interviews with Fintech founders and banking executives. So today we are releasing this episode in mid-January, right at the beginning of tax season. For most Americans, filing taxes is a frustrating ritual that involves hours of form filling and potentially hefty fees to TurboTax or H&R Block. But what if tax preparation could happen in less than 30 minutes instead of several hours? What if it was embedded right into your banking app or payroll platform using data you’re already providing?

That’s the vision of today’s guest, Ben Borodach, founder and CEO of April. Ben’s company has built the first new nationally licensed tax engine in over 15 years, and they’re partnering with banks, fintechs and wealth platforms to embed tax services directly into the financial tools people use every day. In this episode, we discuss why Ben decided to focus on tax as a problem to solve, the massive technical challenge of building a tax engine from scratch, how real-time tax insights can help consumers make sound financial decisions year round. Our conversation offers a fascinating look at how innovation is finally coming to one of the most fundamental and frustrating parts of personal finance. Now let’s get on with the show.

Welcome to the podcast, Ben.

BB: Thank you for having me, Peter.

PR: My pleasure. So let’s kick it off by giving the listeners a little bit of background. Tell us what you’ve done in your career. What, like how your sort of arc of what you’ve been working on has gone.

BB: Definitely. Well, today I’m the founder and CEO of a company called April. We embed tax in every financial decision. And the way we do that is by building the world’s most connected tax software. My career leading up to this point actually did a bunch of disparate, seemingly unrelated things to tax that I’ll tell you about, but actually I think built a really unique foundation to be able to go and partner with some amazing people to tackle this very important and relevant challenge that all Americans have leading into tax season that we’re now rapidly approaching. I started out actually building my first company in New York City while I was at NYU. I had raised some money from a venture capitalist, Lawrence Linehan, who was at First Mark Capital for a marketing automation startup, was sort of literally parallel tracking my exams, Ubering to exams. I was in the first WeWork, so was kind of riding on the last wave of tech, literally.

And I was very exhilarating. My parents didn’t let me drop out of college and they were right not to. And, you know, I made every first time mistake or many first time mistakes and, realized at some point it made sense not to raise more money, even though we were offered it and to try to run the business on fumes and really, we didn’t need a lot of money, right? We were college students and really figure out, could we get to product market fit? Then we realized we just didn’t know what we didn’t know. So I went off and I joined Deloitte Consulting and pretty quickly ended up leading a lot of their fintech innovation practice.

I became the go-to person. I’d studied economics. I’d worked for some governments in the economic department and had always had a real passion for finance and always thought I was going to be either a lawyer or equity analyst of some sorts in the capital markets and ended up spending lots of time with CEOs and CIOs of, you know, American Express, AIG, HSBC, Citibank, a lot of very large companies and realized the challenges and opportunities that existed at the largest scale within US financial services, right?

What are the good things that these companies have and what can they unlock? And what are the things that are probably not going to happen inside those four walls? And did that for a couple of years, was offered a partnership track, realized I didn’t really want to be a career management consultant and ended up coming to a venture group called Team8. And Team8 is very unique in that they incubate or build companies from scratch primarily. Now they also do some general venture investing. And I partnered with the team there that had spent time in some of the preeminent cyber intelligence organizations and they were tackling difficult problems in cybersecurity. I didn’t really have a huge passion for cyber in and of itself. I still think pretty much any system is penetrable if you try hard enough and I’m not totally certain why companies spend the level of or the way they spend their money on cybersecurity. I have a lot of commentary on that, but probably not for today.

And, but they had a really unique venture building model where they would bring together great venture firms like Bessemer and Tomasec and NEA and others. And they would bring together talent that would come from some of these intelligence agencies and other areas. And they would bring together the large technology platforms like Microsoft, Citigroup again, Cisco. So both the users of technology and the providers of technology. And they would try to figure out what are these problems and put together a team and a capital structure to go and tackle them. And so, you know, I actually ended up building a lot of companies at the intersection of cyber and fintech and data.

So one was one of the first crypto custodians, I helped incubate that was using multi-party compute to solve the enterprise blockchain problem that got bought by PayPal and became PayPal Crypto. I did another one around assessing cyber risk as part of the credit score that got bought by Moody’s and Bitsight. And then about five years ago, started looking at the future of consumer finance. And for me, my big passion always was, you know, can I work on something that impacts tens of millions of people for good?

That’s something that’s important to me. I want to make a highly profitable business, but I’d like to be a net positive to the world if I can be certainly do no harm. The second is I want to work on a problem that has a real undercurrent of technological change is either leveraging technological change or is empowered by it. And for us, when we went and looked at April, there had been no new tax technology that had a true tax engine that could process and remit tax returns built in over 15 years. And actually 80 % of tax returns are calculated and transmitted by about just four companies. And so we said, this is a massive opportunity to apply AI. This was just before ChatGPT was released. And so you want to be just early enough. And so I think we were just the right amount early to kind of ride that wave. And it had a huge tailwind for us in the way that we were able to build our technology, bring our technology to market, and ultimately now deliver experiences. And we could talk a little bit more about those to customers that are second to none in the industry.

And then the third is I wanted to change an industry that had been around for a long time. There’s kind two ways, right? Either you can try to build something net new, stablecoins are kind of in that domain, although payments are not new. But certainly a lot of the things going on in crypto, I would say, are a new market. And for me, I really wanted to take an existing market and apply a new technology and change the paradigm and the structure. And I think when you look at tax today, it’s something that cost Americans lots of time and lots of money. It’s something they get very little back for. And it’s something that is kind of a wasted activity when you think about because it’s actually the one time a year people sit down and they look at their finances.

You know, we spend so much time in our industry talking about PFM and all these tooling. And the bottom line is it’s really hard to get people to want to engage in the category when they need money and they need a loan. They’ll come in. They’ll go through the work because they need the money. But to get people to go through the work to better their finances is a really difficult thing to do, even for people that are pretty sophisticated and otherwise upwardly mobile on the economic ladder. And so for us, tax is really this opportunity to take it and have it be something that was once a year, retrospective and historical, and have it be something that’s embedded real time and part of your primary financial relationship. And so that’s what we’re doing here at April.

PR: Okay, so then you did incubate April inside of Team8.

BB: Exactly. So I was running corporate strategy for the firm. We had gone from about 40 million to a billion in assets, launched a couple of new fund families. One of them was FinTech. And we were incubating the company with the, one of the co-founders of eToro that IPO’d earlier this year. He became a partner at the, at the FinTech fund, Ronan, who I continue to work very closely with. And another group called Euclidean Capital that had part of the Jim Simons family office and previously was part of the leadership team at Merrill Lynch.

And so we were sitting together in COVID all from our homes, you know, basically sitting there saying, Hey, there’s all these neo banks. A lot of them seem to be solving the same problem. The future is probably not this because digital seems like it’s now been solved. And with the availability of lending as a service payments as a service banking as a service, pretty much anybody can go start anything at this point. And so for us, I think we looked at the market and said, the future is personalization.

It’s can we actually orchestrate a connected user experience in a digital format that actually is relevant and hyper-personalized to the individual. Because the old way of banking was walking into a brink branch, they gave you a cookie and you build a relationship with your local banker and they’d sell you services. And today, for many people, for most people, it may be a hybrid service. I’m not saying the person doesn’t have a place, but for many people, the digital storefront is going to be that primary relationship. And I think we understand that many of these organizations were built as franchises, built through M&A, built through disparate service providers. And even though you think you’re banking or engaging with A, there’s actually like 30 mini organizations as part of that thing that aren’t really talking to one another. And so we saw tax as a critical linchpin to help these platforms offer a complete service on the one hand, but then also help the customer transition their data in a way that actually had a fine grain enough and relevant data set where that platform, if the user obviously elected to share that data with them, could anticipate their needs and better serve them. And so that was sort of the genesis behind April.

PR: And so you decided not to go direct to the consumer. You’re sort of taking advantage of the world of embedded finance. And so you decided to do the embedded tax as the offering. Maybe you just talk us through that. When you’re looking at this problem, you decided that it really should have been an embedded rather than a direct solution.

BB: Yeah, look, I think there are basically two other ways you can get your tax return done today. You can go to TurboTax.com or H&R Block retail stores and some other companies that are derivatives of those businesses, or you can find a mom and pop CPA. I think neither of those are perfect solutions, but they do get the job done. And I think for us, if we wanted to do it differently, we would have had to go and build Chime or PayPal or Capital One or Chase to actually fix the problem and then that seemed to not make a lot of sense. And I think we have this belief that customers are already being served by somebody, right?

There’s very few customers in financial services today that are not being served by somebody. Now, there are parts of the market that are underserved, that can be served better, and we could talk about what some of those areas are. But I think our thought was rather than building all these services and re-aggregating the customers, can we take advantage of all the amazing capabilities and brands that have already been built and just provide them something that they otherwise wouldn’t have?

PR: Gotcha. Gotcha. So then maybe talk about what it is you’re providing. Can you just take us through a description of what your product does?

BB: Absolutely. So when we say that we’re embedding tax in every financial decision, what that means to us is that inside your primary financial relationship, which could be your bank account, it could be a small business platform, it could be a wealth manager, it could be a payments company, it could even be your payroll firm for others, anywhere where you’re, you know, an American household or small business is managing or engaging in their financial services. We believe that you should be able to do your taxes there principally.

So we have a full suite of services where you can either do self prep. So think like a DIY, TurboTax style, or you could actually drop off your documents and have a full CPA style experience embedded where you already are managing your money, except that we can connect it. So we can leverage the data that you already have and are already providing just by virtue of existing and engaging in the financial category. We can offer this service cheaper and faster. So last year, the median time to file an April self-prep was about 25 minutes, a little bit less than that. The average time to file according to the IRS is like up to eight hours and even within the self prep category, many are spending two plus hours, right? And many of our users are filing for free because their financial platform is willing to underwrite this as part of a value added service. So that’s within the prep part. We then have planning capabilities.

So we can help a customer estimate their refund in real time. We can help them make an estimated payment or calculate an estimated payment. Again, all within the confines of the applications that they’re already using. And then this year we also announced with NASDAQ private market, the ability to forecast a stock sale, the tax impact of a stock sale in real time. Think about the number of employees who get RSUs, get stock options, traders on Robinhood, folks that are just engaging much more in the category than ever before, but then are stuck not knowing what should they be doing. And then we have an insights and analytics platform where we wrap this together for our partners and help them better understand their customers and be more relevant.

PR: So then you’re, depending on the platform I imagine, most people think about, you know, once a year, like we’re recording this just before Christmas, tax season is about to get into high gear in January, which is when most people think about it. How are you kind of changing that? If you’re embedded into the, into the software that people are using every day, like obviously you have the option to not making it a once a year thing. Like how do you actually do that in practice?

BB: So for example, if I am engaged in a secondary sale of my stock, I’m an employee at a large startup, Stripe, SpaceX, whatever. And they said, Hey Ben, this year you get a thousand shares. Next year they give you 2000 shares and those stocks are at different prices. That may even be different types of stock. It could have been, gave you NSOs and now they’re RSUs. And now they say, Hey, we have this amazing opportunity. This fund has agreed to buy, you know, at this premium to the stock you own. Would you like to sell some and maybe you want to use that to buy a house or put money away for your child’s college tuition, whatever have you.

Now you’re like, well, I don’t want to sell everything because I think the stock’s going to go up or the firm told me I can only sell up to 20 % of what I have and now I have to pick. And so now there’s all these considerations. Do I want to maximize to get as much money after tax as I can? Do I want to minimize my stock bill, my tax bill, sorry, for this year? You know, maybe some of these are short-term, some of these are long-term. So there’s all these different considerations and then there’s considerations based on what else may be going on in your financial life.

And so by bringing this to the services that someone’s already using, in this case, NASDAQ Private Market, it’s available instantaneously for the customer based on the sell data that they already have. Otherwise, you have to go extract that data and then you have to engage a CPA. They’re only giving you partial information. They start charging you by the hour. It gets very expensive. They don’t have the full context. They’re not your financial advisor. And so you end up in kind of this back and forth that becomes very costly and doesn’t necessarily deliver an optimal outcome.

And so by really building something that’s purpose built for these individuals on top of our API and our tax engine, we’re able to totally reconfigure the way that individuals are thinking of disposing and just taking advantage of what’s already theirs. It’s part of their income. They’ve already worked for it.

Another example could be in Gusto. So inside of Gusto today, there are millions of people who are paid. Many of those individuals are due a refund at the end of the year. That means that they’re kind of owed money. They’re overpaying the government essentially. And so there, what we’ve done is we have our paycheck optimizer where the user can run through a process and see what they might be owed and then make adjustments to their W-4 form and be able to get some money now instead of taking a higher interest loan.

So it’s these types of things that you can do very uniquely in a data-driven format inside of places where people are already engaging in their money and that’s what we mean by that.

PR: So then maybe you could talk about then who your target market is because I you got like a Gusto or Robinhood these are you know they’re very different types of companies you go you talk about banks I mean as you’re talking I think all this everyone could any consumer facing fintech or bank could offer this. So but I presume you’re not trying to boil the ocean. I mean what who are you focused on?

BB: It’s a great question. So when we started building the tax engine, one of the principles we had as a business is we need to build automation first and tax engine first. We want to be a real alternative to the financial industry that they can trust and rely on. So we built this stuff from scratch and we started by building for the simplest customer. was a federal only W-2. That’s how we started in the first year. And then we layered in state coverage and then we became, we got national coverage this year and now we’re supporting basically all tax incidences that have at least 1 % according to the IRS published report as to how many US citizens have different tax occurrences. So that’s going to be things like K1s, rental income, know, a pretty broad swath of, you know, of tax coverage.

So one limitation basically is where are you on that automation track? And who, you know, what types of customers are you able to service? The second consideration is how are you delivering value and how are you penetrating, you know, those different ecosystems? So today we focus primarily on three categories, banking, small business platforms and wealth management. It’s pretty broad, but there is a confide in there is stuff that we don’t do. And we’re basically serving Americans that are sort of below, let’s say about a half a million dollars or so in annual income, 5 million and below in liquid net worth and businesses that are about one and a half to $2 million below in revenue. So that’s kind of our service area. It’s not a hard rule, but we’re basically aiming at the middle of the bell curve, you know, and we’ll stretch a little lower to moderate income Americans and we do stretch up to, you know, sort of affluent, but we’re not kind of aiming, I would say at that top 10 % at the moment and certainly not businesses that are truly medium enterprise.

PR: Right, right. So then say there’s a bank exec listening to this and thinking, yeah, we don’t do anything on the tax. Most banks do nothing at all. I have a top 10 bank and they provide the mandatory forms and that’s about it. So why should a bank move into something that they probably don’t know much about and what’s involved in that integration? So when you’re talking to banks, what are those conversations like?

BB: You know, the reason to be pessimistic is I think the bad news, and this is something that I say to many of the consumer banking leaders that I talk to, is that they are behind. They are very, very behind. And I think, you know, seven to 10 years ago, they, they understood they were behind and then they caught up a little bit and they thought it was good enough. And now they’ve, I think that was actually bad. And I think there’s a couple of things. If the old mantra of banking, is we want to be the place where you store your money. The new mantra of banking needs to be the place where we’re the place where you spend your time. And the way that we spend your time with us is we solve your problems.

And I think the problem today is that most banks do not solve a problem for anybody. Storing money is not a problem. There are tons of places to store your money for free. And actually, when you go to some of those places, they will give you some really amazing services just by engaging in them. And you don’t have to pay for any of it.

And so I think this idea that we’re going to be, you know, primarily a brick and mortar, you know, business in the community, and then we’re going to take those funds and we’re going to lend them out to a real estate development shop is just woefully inadequate. The customer actually needs to be the customer. They can no longer be the product and you actually have to solve their problems. So what are the problems that people have? They have cash needs. They need credit. They need payments.

Tax is on the list of something that everybody’s got to do. It’s every single year, they all have to do it. They don’t want to pay more for it than they need to. And if you solve that customer’s problem around tax by giving them a better, cheaper, faster solution that they can do with you, you’ve now earned the right for them to spend more time with you because now they’re talking to you and telling you, Ben, I had a kid this year. I need to buy a new home. Here’s things that I’m trying to do with my financial life. Can you help me achieve those things? And I think that is the most powerful thing that a banker could be engaging with, of course, with consent and with all the right Ts and Cs, with their customer base, because that’s gonna make them aware of the products and services they need to be building. And it’s gonna allow them to meet their customer, where they are and when they need those services. And if you don’t fail to do that, it doesn’t matter what else you do, somebody else is going to eat your lunch.

PR: Right. So then are you thinking about integrating into the banking cores like the FIS, Fiserv, Jack Henry’s of the world, because that will give you much, much broader coverage or are you going out one by one to the banks?

BB: You know, from an approach to company building, I think you’ve got to go direct in the beginning. We’re certainly talking, you know, to those firms or similar firms. And I think certainly they have a reach. You know, we don’t necessarily need to be integrated into the core to be relevant. Being integrated into, you know, the marketing life cycle and the user facing apps in many cases is going to be sufficient. But certainly those distribution channels, you know, would be an amazing way for us to get true scale of depth and breadth within the U.S. banking sector.

PR: Right. So you mentioned this already that the TurboTax, H&R Block, two of the biggest tax preparers, would you say? mean, they certainly dominate the advertising when I saw on TV. I don’t know, and I don’t know this space well enough to know, do they have an embedded offering or is you really, you’re the main game in town when it comes to embedded tax systems?

BB: Yeah, here’s what I’d say. H&R Block has Spruce, which is a digital bank, right? And TurboTax bought Credit Karma. And so when you go and prep as a user, what they’re doing is they funnel you through these huge marketing machines and then they try to stay with, and then they try to get you as the customer to stay within your walls. So forget the fact that these companies were designed decades ago, not API first, not built in a way that would enable them to really be a B2B platform. That’s what we are. We’re highly configurable. When we go into a customer A versus customer B, we may show up actually quite a bit different because we’re a true enterprise grade infrastructure. So these guys are not designed to build that.

They’re a one-stop shop and you kind of funnel in and figure out what skew they get you to. If you can figure out what that is, I think TurboTax is kind of confusing just to figure out what you’re even buying, but nevermind. Obviously they’ve built a great business and they understand what they’re doing over there.

But the reality is they bought Credit Karma for $7 billion or whatever it is. And I think there’s just a massive conflict of interest there. How do you go to a big bank and say, hey, we have your best interest in mind. We’re going to partner with you and then go back and try to eat that customer on the other side. And I think by being truly independent, by being a true Switzerland of tax infrastructure, we just have a very unique opportunity and positioning in the landscape.

PR: Right. And then what’s it look like when someone engages with April? I presume, let’s say you’ve got a consumer facing fintech app or a banking app, is there just like a tax button on there now? I mean, how do you present it to the customer?

BB: Exactly. So now I think, you know, Americans are used to having, you know, this sort of storefront where they come in and they can do payments, credit, mortgage, you know, whatever it is they need. And now there’s a tax module and they, they open that front door that’s owned by our partner. And then when they come in, that’s basically our SDK or iframe. And then they start engaging, you know, in whatever, you know, they’re doing. It could be an estimation, a prep, a consultation, whatever it is.

And then when they leave, they can elect to share the data and some of the return statuses and other information would flow back to their primary financial institution and allow them to leverage that data to better serve them.

PR: So I read that you became, it says on the press release, the first nationally licensed e-file provider. What does that mean exactly and how did you do that?

BB: Right, so I think this isn’t a well-studied segment in the sense that if you want to become a bank, now there’s a few thousand banks and it’s pretty hard to become a bank, but there’s a whole bunch of law firms and regulators that will tell you what’s involved in becoming a bank and there’s a process and there’s a federal charter or a state charter and different processes that you can follow.

The tax world is, there’s a similar process, but it’s not really as well understood because we’ve only actually ever done this as a country a dozen or so times. So you can actually go look at the companies that have these regulatory approvals and there’s not many of them. You know, it’s Intuit and H &R Block and Thomson Reuters and Walter Skluwer and then about somewhere between six and 10 other companies that have ever done this ever. And some of those companies have multiple tax engines. And so when you think about what’s happening here, if we break it down, a customer’s coming with their information and saying, here’s my information and I’m going to, maybe I’m going to fill it out or I’m going to give it to a CPA.

And then basically there’s a software and the software actually does two things. It calculates the return. So it says, Ben, you owe a thousand dollars to the IRS, to the US treasury, and you owe $2,000 to the state of New Jersey. And then it transmits that file to those relevant jurisdictions and it manages that handoff. And so that process, you actually have to get your organization signed off on. You have to get your software approved by both the federal government and the state. And you have to get it approved for the specific use cases that you support.

And so that’s what we did. The last company that did this was the company that Credit Karma bought. It became Credit Karma tax. Now it’s Cash App taxes. It’s actually the day that we decided to start the company was the day that Credit Karma was forced by the Justice Department to sell the tax business due to fears of monopolistic behavior by TurboTax. So they divested that business to Cash App. we said, okay, now TurboTax and Credit Karma combined, Cash App, which was the fastest growing digital bank at the time now bought a tax business, what’s everybody else going to do?

And so these things take years to build. mean, I think some of these other companies, and so we know this because the person who last did this for that company actually runs tax in April and they were the last company to do it. Yeah. Funny how that kind of comes full circle. So this takes years. It took us with AI and tens of millions of dollars in funding and banging our head against the door with the smartest engineers from Google and Amazon and whatever, you know, other place we could find.

It still took about three years to do that. And that was just to get the 1040 with most of the use cases supported. Now we’re adding stuff all the time. So this is a really, really big challenge. And I could talk through some of the learnings and more stories from that, but you literally have to go state by state and there’s no way to shortcut it at the end of the day.

PR: So then, and I presume, like the technology capabilities at these states and the IRS are not, there’s no like API you can just hook into, right? I mean, how are you actually integrating into these organizations?

BB: Yeah, there are different, they don’t all work the same, unfortunately. So there’s something called e-file or modern e-file. So the IRS has a standard and many States adopted that standard, but some did not California did not, think, because they decide that they’re bigger and they can be different. And to some extent they are one of the world’s largest economies just in that state, but it makes the process actually even more cumbersome because you’re not in the end of the day, just integrating with the IRS. You have to do the integration with all these States and they all have their own idiosyncrasies.

They manage errors and rejects differently. They all have their own timelines and ways in which you can test with them. So it’s a pretty not well understood and very specific process that you have to go through. And you have to get through the IRS first. And if you don’t get through IRS, you can’t even go test with the states.

PR: Okay, so it’s interesting, you’re a very modern company and you’re sort of taking advantage of a lot of the sort of embedded finance trends that have happened. I’m just curious, like, how have you sort of, when you’re building April, did you kind of look at the sort of this movement towards embedded and think that’s really the technology is here now, we can do it this way. So it’s really… You’re building on the backs of sort of all of this, the growth in embedded finance over the last decade.

BB: Yeah, I think that’s right. I think there’s different angles, you know, that you can look at this stuff from, right? So one was a principled belief about the way that we needed to solve the tax problem. The second was the maturity of these platforms, right? Because if they said, hey, I’m just adding investing now, I’m not going to be able to do this for a while, or I’m still figuring out lending, right? And we had to build this in a way where it was very lightweight for them to be able to do. So it’s on one hand, very configurable and very customizable, but on the other hand, very lightweight from an embedded technology standpoint.

And then you needed a certain development or maturation of other kinds of technologies because our API calls have to work in milliseconds. And in some cases, we’re returning a very intense computational answer because the old way that these tax apps were built is they were basically these long static flows. But of course, we didn’t want to build that. We wanted every taxpayer to have a highly personalized and specific experience. So if you’re on our app, you’re only seeing questions that are specific to you.

And so as the customer traverses through our app, we’re literally on the fly changing what you see, but also making sure that your tax return is a hundred percent accurate. And so to do that, we had to really compress the amount of time to return, you know, some of these data points back to our partners from an API standpoint. And so we really, you know, broke ground in the way that a lot of this stuff was done. So yeah, it’s a maturation of AI, cloud services, embedded finance, that all come together at the right point. And I think a lot of the best innovations…If you think about Uber as an example, obviously that wouldn’t have been able to exist without mobile, but it really only took off as mobile technology got to a place where it was relevant enough to be able to process. It was really the iPhone plus cloud at the same time that allowed the computational speed for Uber to be possible.

PR: So then what’s happening when someone, a bank decides they want to integrate with you and offer tax to their customers? What’s involved? What’s the typical timeline and technology lift?

BB: Yeah, I’d say for most, you’re talking about a quarter, embedding the technology takes a week or two. Now, know, so think about that’s one sprint, and then maybe you add a couple of sprints for testing and maybe they want to wrap it, you know, and build some some data hookins with some other processes that they’re doing, let’s say to pre fill a 1099 for a customer and make it easier for them. So, you know, that could add a couple more weeks to the process.

The two bigger areas is standing up the marketing process and then L&C because we’ve designed this in a way where a chartered bank could do this in a completely compliant manner, but banks have their process. so getting this through a banking process that’s got other regulators looking at them, they’re gonna take you through their risk and compliance, their L&C, and that’s really gonna take about a quarter. We’ve got it up, one very large publicly traded fintech company told me we were the best partner they’ve ever had.

You know, our trust center, our SOC 2, we’ve invested heavily. We call my partner and I from cybersecurity. So we understand this stuff and we’ve made it as easy as possible, but really getting L&C to wrap their heads around it is ultimately the thing that there’s just really no true shortcut for. So, you know, probably a quarter plus or minus is what you’re looking at.

PR: Right. you know, tax is inherently a political topic or it’s something that, you know, where there’s always changes. mean, we have either tax increases or tax decreases depending on who’s in the White House and who’s controlling Congress. But how do you, do you think that that’s even, mean, is that a relevant thing for you to consider? Because, I mean, they’re obviously, you’ve got to be, up to date with whatever the the winds of the the tax policy is happening. How do you think about that when building a tax infrastructure company?

BB: That’s right. mean, at the end of the day, what’s important to us is that we have a trusted system that calculates returns that has, you know, the highest standards of availability and uptime and can connect and process and transmit in, you know, the highest of strenuous, you know, times of the year. And so that’s what we’re focused on at the end of the day as a company. You know, from a policy standpoint, yes, we, you know, that’s the job that Congress does. Americans elect Congress. We just execute the will of the American people.

in terms of the way that the law is interpreted by the IRS. So we are takers of that. We are not policy makers. We are just policy implementers in our software. And so as a company, we don’t have a political outlook on that. At the end of the day, our job or mantra is to try to get you the best, as fast, cheapest return that we can deliver to you. So we are trying to make this as approachable to the taxpayer. And I think that that’s one place where we look at public policy and say private industry has a role here, okay? We spent less money developing a nationally chartered tax engine than the US government spent in one year of trying to get direct file online just for federal coverage. Okay, we did it in all 50 states. We have no issue, we are policy agnostic, okay?

And that’s very different because our peers lobby the federal government heavily, we do not. We are very focused on helping or sort of…explaining to the government that they need to invest in their technology to make it better so that we can build better products and services and their constituents can get better products and services from them. At the end of the day, what we think is needed is better competition, more competition. A few players have dominated this industry for way too long. And so we are pro anything that gives the taxpayers more options. And we just think that we can compete to be the best option for them.

PR: Right. Okay. Well, last question then. What’s your vision for April? Where are you taking this?

BB: Yeah, I mean, we believe that tax permeates our country. It’s at the federal level, it’s at the state level, it’s not going away. It’s much more than just taxation to your earlier question, Peter. It’s really the way that we administer our public policy. It’s the way that we administer our socioeconomic policy. We give incentives, we give credits that helps people expand their families, that helps people start a new business. That is literally the economic engine of the most powerful GDP in the world. And we think that we can add a lubricant to that, right?

By helping a business owner understand at the point of decisioning a better way to get credit from a tax standpoint, helping an investor a better way to invest their money, helping a new family understand, you know, a way to afford a new home and understand the laws and the way that they impact their bottom line and their finances in a very real way by permeating the largest and most important financial institutions. While I if we do that, Peter, we’ll have accomplished a lot. So I think for us, it’s about staying focused on our mission and vision and really just increasing the penetration and the availability of our services throughout the nation.

PR: Okay, that’s a great place to leave it. Thanks, Ben. It’s really been fascinating talking with you, learning more about what you’re doing. It’s a great service you’re providing because, as I said, everyone has to deal with taxes and making it simpler and easier and more efficient. That’s a great thing. So best of luck.

BB: Thank you.

PR: To me it makes sense that taxes need to be transformed from this annual chore into real-time financial intelligence embedded at the point of decision. It is somewhat paradoxical that the one time a year people sit down look at their finances is after the year is already over and you can’t do much about it. We live in a real-time world and we should be getting intelligence in real-time about the tax implications of any major financial decision. That is what you can expect when your bank, fintech, wealth manager or payroll provider embeds April into their app.

Anyway, that’s it for today’s show. If you enjoy these episodes, please go ahead and subscribe, a friend or leave a review. Thanks so much for listening.