Electronic tax

Bill would ban IRS from creating free electronic tax filing system: NPR

NPR’s Rachel Martin talks to ProPublica reporter Justin Elliott about a bipartisan Congressional move that could bar the Internal Revenue Service from offering free online tax filing,


It’s April 15th, which means you need to file your taxes by midnight if you haven’t already. If you want to file online, you usually have to go through a private company like H&R Block or Intuit, the makers of TurboTax.

Why should you use them? Well, an agreement with the IRS and private tax preparation companies prevents Americans from filing directly online with the IRS. And this rule could become permanent. Lawmakers on both sides of the aisle are trying to pass the so-called Taxpayer First Act, which would permanently prevent the IRS from creating a free electronic filing system for tax returns.

Rachel Martin spoke with ProPublica reporter Justin Elliott about why this bill is needed.

JUSTIN ELLIOTT: One of the things this bill does is that it codifies an existing agreement between the IRS and the private tax preparation industry – so companies like the maker of TurboTax. And one of the things this agreement says is that the IRS will essentially never create its own version of TurboTax. Thus, the IRS will not primarily compete with the industry. So that means a lot of Americans will have to keep paying, you know, $ 50 or $ 60 to use TurboTax or H&R Block instead of essentially having, like, a government option to file their taxes.

RACHEL MARTIN, BYLINE: So that got a bipartisan deal, huh?

ELLIOTT: Yeah. I mean, it’s a long-standing program, and it’s also something the industry has been pushing for for a long time. And so H&R Block and Intuit had been insisting on this for years. And you know, they offer a free option if you earn below a certain income threshold. But very few people end up finding this, and a lot of people end up using the paid version.

So essentially this bill would continue this agreement between the IRS and the industry, whereby the industry offers this option for free, but the IRS is committed to never creating its own version of these preparedness services. taxes.

MARTIN: So basically it means Americans have less choice.

ELLIOTT: Yeah, exactly. And you know, one of the remarkable things that happened was that after we wrote about it, people from other countries were tweeting me on Twitter saying that in Germany, in Finland and other countries, doing their taxes took about five minutes because the government actually provides their pre-filled forms because the tax agency already has their salary data.

MARTIN: So, is it safe to assume that there’s been a lot of lobbying from businesses that get paid when consumers come in and say – it’s too complicated for me to do that. Can you do them?

ELLIOTT: Yeah. I mean, just H&R Block and Intuit – they’re the two bigger ones – together they spent over $ 6 million lobbying on issues, including this one, last year – had been pushing that it has been law for many years now. And the current bill contains many other provisions, some of which are supported by consumer advocates. And I think that’s one of the reasons it now has bipartisan support and could become law.

MARTIN: But are consumer advocates supporting that?

ELLIOTT: Consumer advocates oppose this provision. But there are other completely unrelated provisions in the bill that you know talk about the IRS debt collection practices, for example, that consumer advocates have supported. So, you know, that’s one of the reasons I’m told this bill gets bipartisan support in Congress.

MARTIN: Justin Elliott with ProPublica, we appreciate that. Thanks Justine.

ELLIOTT: Thank you very much.

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