Austin Woodward and the price of a missing form

Austin Woodward had made the spreadsheet work. A client had cryptocurrency transactions to report, so the accountant built an Excel model to calculate the taxes. The calculation became complicated. The hours accumulated. Eventually, the fee for preparing the return exceeded the tax the client owed. The method had become rather more expensive than the problem.

It is a useful place to begin the story of Taxbit. Before the venture funding, before the government work, before the billion-dollar valuation, there was a professional discovering that his perfectly respectable method produced a perfectly unreasonable bill. Software had helped create this new kind of financial activity. Someone would have to build software for its consequences.

The episode offers a useful introduction to the accountant behind the company. It captures the particular way he looks at digital assets: through the practical work they leave for somebody else. A transaction finishes on a screen. Somewhere, an accountant still has questions. For Woodward, those questions became the beginning of a company.

An accountant inside a software company

Woodward earned a master’s degree in accounting at Brigham Young University and became a certified public accountant. He worked in finance at Qualtrics, the Utah enterprise software company, including as controller. That combination matters. He understood the reporting obligations inside a growing business and had watched software become a business of considerable scale.

His route into that company also supplied a connection that would return later. Jordan Plater recruited him to Qualtrics in 2013. In 2021, Plater joined Taxbit as head of sales. The colleague who had once brought Woodward into a software company was now helping him sell the software company he had built.

International payments supplied another irritation. Woodward recalled missing a bank’s wire cutoff and delaying payroll for Qualtrics’ Australian operation. A transfer could be initiated electronically and still spend days waiting to clear. For someone responsible for getting people paid, the gap between pressing a button and completing the job was more than a technical curiosity.

By 2017 he was exploring digital assets. The attraction included faster movement of money and fewer intermediaries. His professional experience also made the complications visible. Owning and moving these assets created records that finance teams and tax preparers needed to understand. The payment might travel quickly. Its explanation could take rather longer.

“And taxes and accounting, the favorite topic.”

Austin Woodward, opening a 2023 podcast conversation

The family had the right departments

Taxbit dates its company start to 2018. Woodward’s brother Justin was a tax attorney; their cousin Brandon worked on development and design. Between them, the early team had people who could interpret a rule, calculate its consequences, and build an interface through which somebody could actually use the result.

The business began in the brothers’ father’s basement, with their father supplying its first financial backing. There is a domestic neatness to the picture: an enterprise taking shape downstairs while the family’s money helps keep it going. The professional mix, however, explains more than the address. Tax software needs legal judgment as well as working code.

Woodward is happy to give his younger brother the intellectual advantage. “My brother, Justin, he's younger and smarter than I am,” he said in a 2021 conversation. He also described the need for transparency and honesty when relatives become business partners. Family familiarity does little to remove the need for difficult conversations.

Late in 2018, SAP agreed to buy Qualtrics for $8 billion shortly before its planned public offering. Woodward had worked on the S-1 filing. The acquisition opened a window for him to pursue Taxbit full time. He had seen a company prepare to explain itself to public investors. Now he was building tools to help explain a different set of financial activities.

Five months, two cheques

Taxbit’s financing accelerated in 2021. A $100 million Series A in March was followed by a $130 million Series B in August. Paradigm and Tiger Global co-led the first round. IVP and Insight Partners led the second, which valued the company at $1.33 billion at the time.

The speed makes an arresting chart. The intended business is more revealing. Taxbit was developing software for individuals, enterprises, and government users. It opened a second headquarters in Seattle and reported tripling headcount between the rounds. The operational challenge was spreading across customers with very different reasons for wanting the same transactions to make sense.

A consumer wants to get a return filed. A brokerage needs reporting software that works inside its own service. A finance department needs records it can reconcile. Serving those customers demands more than a calculator with a handsome front door. The information has to reach the place where someone can act on it.

Qualtrics co-founder Ryan Smith became a Taxbit investor. The connection gives Woodward’s earlier career a satisfying continuity. He had worked inside one family-founded Utah software business and was now building another. Experience gained preparing filings and implementing systems had become relevant to a market whose public conversation often preferred price charts.

Inviting the tax collector in

In May 2021, Taxbit announced that the IRS had selected it, subcontracting under DPI Inc., to provide data analysis and tax calculation support. The arrangement put the company’s software on the government side of the reporting problem. The subcontract detail matters: it describes the actual route into that work.

Woodward treated the selection as evidence that digital assets could be accommodated within existing obligations. His enthusiasm for the technology included the machinery required to report it. In his account of adoption, tax authorities were among the institutions that would need better tools as the market developed.

The company also drew a boundary around the service. Its government work used data supplied by the IRS, with the agency choosing the taxpayers independently. The announcement distinguished that business from Taxbit’s individual and enterprise products. Trust required customers to understand what the government service actually did.

In May 2022, Taxbit announced an alliance with Deloitte Tax. The pairing joined software with professional tax experience to help organizations handle information and cost basis reporting. For Woodward, selling into established institutions meant working with people who already knew those obligations. An elegant product still needs to fit the working day of its customer.

Who should pay for the form?

Woodward’s consumer argument was direct. Digital asset users were being asked to spend money reconstructing information they needed merely to report their activity. He objected to both the expense and the burden of figuring it out. Building further up the chain, at the enterprise level, offered a way to change the experience downstream.

The Taxbit Network launched in January 2022 with free 2021 tax forms for transactions on supported platforms. Users could connect data and download forms for their returns. The launch had a defined boundary: transactions on platforms outside the Network could still incur a charge. That distinction belongs beside the promise.

The ambition was to make necessary financial information easier to obtain. There is something appealingly modest about the desired result. The user does less homework. The accountant receives something usable. Nobody has to congratulate a spreadsheet for surviving another tax season. For the business providing the form, that convenience becomes part of the service its customers receive. Woodward’s accounting background gave him a reason to care about the handoff: even useful information creates more work when it arrives in a form that someone else has to reconstruct.

A bigger set of books

In January 2023, Taxbit acquired Tactic, expanding its digital asset accounting capabilities. Accounting and tax reporting are related jobs with different requirements. The acquisition brought technology and people into a business already serving financial reporting needs. Ann Jaskiw, Tactic’s co-founder, subsequently appeared alongside Woodward to discuss the combined work.

The expansion did not exempt Taxbit from the pressures around it. In June 2023, the company announced a restructuring that cut 80 jobs. Its new leadership described a difficult market, regulatory uncertainty, and a need to extend runway. Any account of the company’s growth needs room for that adjustment and the people affected by it.

On June 8, Lindsey Argalas succeeded Woodward as CEO. She had been Taxbit’s chief operating officer and brought experience from Intuit and Santander. Woodward moved to chairman, with responsibilities focused on strategic partnerships and the company’s long-term direction. The business he had helped start now required a different division of leadership work.

Taxbit’s later development has continued around enterprise compliance. Its current company history describes a progression from helping individuals piece together transactions to supplying the systems businesses use for reporting. That progression gives the early spreadsheet story a longer meaning: the place where a problem first appears is not always the place where it can be solved most effectively.

Woodward began with an accountant’s objection to an unreasonable amount of work. The company grew by moving that work into software and closer to the institutions creating the transactions. For all the vocabulary attached to digital assets, his starting question remains accessible to anyone who has opened a bill: why did doing this properly have to be so difficult?