That deal has been revived for more than ten years and the new bill before Congress could make it permanent. 1 reason why folks Congress might be pushing this through is the money all that H&R Block and Intuit invested to lobby Senators and Representatives. ProPublica estimates the tax prep industry has spent $6.6 million to urge for its IRS filing deal. Neal, the Ways and Means seat, received $16,000 in contributions from both companies in the last two election cycles, according to the ProPublica report.
Back in 2002, the IRS entered into an arrangement with a consortium fo tax software companies, that was known as Free File, Inc.. As part of that deal, the firms agreed to open access to submitting software for approximately taxpayers who earn less than $66,000 and the IRS agreed not to compete with the companies by creating its own software.
Among its stipulations would make it illegal for the IRS to create its online system . This ’s right, members of Congress are prohibiting a branch of the government from offering a service which will make the lives of all of their constituents much easier.
Americans who earn less than $66,000 can access the totally free File Inc. software online through the IRS.gov website and all taxpayers can download digital versions of IRS paper types through the service.
Because of pressure from tax preparation business, Congress is preparing to prohibit the Internal Revenue Service from ever building a free electronic tax filing system.
The agencies accountable for taxes have their own programs which make filing taxes efficient — and completely free. But that would eat into the profits.
As ProPublica reports, the attempt is a bipartisan one. The House Ways and Means Committee, headed by Massachusetts Democrat, Richard Neal, passed the Taxpayer First Act.
“This could be a disaster. It might be the last nail in the coffin of the idea of this IRS ever being able to make its own schedule,” Mandi Matlock, a tax lawyer who will work for the National Consumer Law Center, told ProPublica.
The IRS could create a free system. It might also submit tax returns for folks to approve and then file based on.
There are a number of ways which the IRS can make tax preparation easier for taxpayers dealing with the only certainty in life other than death.
Roughly 70 percent of American taxpayers are already able to register for free online, but just 3% do, based on information in the citizen advocacy organization, The Taxpayer Advocate Service.
And why is Congress taking this step? Because firms like Intuit, the company behind TurboTax, and H&R Block have been lobbying lawmakers for many years to take the step.