IRS bringing in outside contractor on review of ‘Free File’ program

IRS Commissioner Charles Rettig said Wednesday that the agency is engaging an outside contractor to review its “Free File” program, and that he hopes the review is completed in the next several months.

“We need to get it right, and the people need to be able to file their returns,” Rettig told reporters after a Senate appropriations subcommittee hearing.

An IRS spokesman said that the agreement with the contractor is still being finalized.

The Free File program is the IRS’s partnership with tax-preparation companies in which the companies offer free services to low-income taxpayers.{mosads}

In recent weeks, the investigative news outlet ProPublica has reported that some tax-prep companies participating in the program have taken steps to hide their free options, drawing concerns from lawmakers on both sides of the aisle and prompting some of the tax-prep companies to be hit with lawsuits.

The IRS said earlier this month that it’s reviewing the free-file program, and that it “will take fast action to ensure the integrity of the program.”

Rettig said Wednesday the IRS plans to task the outside contractor with reviewing the contracts between the tax-prep companies and the IRS.

“The software providers have agreed to work with the outside contractor, and the contractor will advise us going forward,” he said.

Rettig added that the timetable is “hopefully less than 90 days.” 

The concerns about the free-file program have slowed down a bipartisan IRS reform bill, which passed the House but has yet to get a vote in the Senate. The bill would codify the free-file program, which ProPublica drew attention to hours before the House voted on the measure.

Rettig said that the IRS is “optimistic about the bill” and that the agency needs many of the provisions in the measure, such as one that would make it easier to hire and retain information-technology personnel. 

– updated at 3:37 p.m.