Taxpayers denied access to “return-free filing”
Last month, we detailed how Intuit, the maker of TurboTax, hasfoughta proposal that could make filing taxes easier and cheaper for millions of Americans.
As we noted, tax activist Grover Norquist and other conservatives havealso opposed the proposal, called return-free filing, which would give many taxpayers the option to receive a pre-filled return that they could simply review, sign and send back, all for free. Return-free filing has been endorsed by many experts and adopted by several European countries.
As it turns out, Norquist has also recently weighed in on the side of the tax prep industry on another issue.
A House bill introduced earlier this year would bar the IRS from offering taxpayers software that would compete with programs like TurboTax. In March, Norquist and otherswrote a letterto members of Congress that urged them to support the bill what they called a pro-taxpayer, anti-IRS power grab legislation.
At issue is how Americans file their taxes and whether electronic filing can be offered directly through the IRS.
The bill is called theFree File Program Act, co-sponsored by Rep. Peter Roskam, R-Ill. and Rep. Ron Kind, D-Wisc. It declares that the IRS, with a few narrow exceptions, may not establish, develop, sponsor, acquire, or make available electronic filing service or tax software.
Roskam declined to comment. Spokespeople for Kind and Norquist did not immediately respond.
The bill would also make permanent theFree Fileprogram, a public-private partnership between the IRS and the tax software industry created in 2002 to offer some taxpayers free electronic filing.
The industry group behind the programboaststhat almost all taxpayers can use software like TurboTax or more primitiveelectronic formsfor free. But access to the more sophisticated software is limited by income. Only about 3.5 million taxpayers used Free File last year, according to aTreasury Department tallythrough the end of April.
The pact governing the partnership, which countsIntuit as a member, includes a sweet deal for the industry: In return for the companies offering free software to some, theIRS agreed not to developits own free, online tax prep services. The current deal expires next year.
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Taxpayers denied access to “return-free filing”