Progressive groups, tax experts warn against ‘free file’ legislation

Organizations including major progressive groups and tax experts are urging Congress not to codify the IRS’s Free File program, which requires that tax preparation companies offer free services to low- and moderate-income users.

In a letter to the relevant congressional committees, the groups argued that the program has been misused and that putting it into law would lock in its flaws.

{mosads}“We have long-standing, serious concerns about Free File,” said the letter, which was signed by groups including The Center for American Progress, Public Citizen and Americans for Tax Fairness. 

“We urge you to ensure that pending tax administration legislation does not lock the IRS into the existing Free File arrangement or prevent it from pursuing options that could provide low- and moderate-income taxpayers with better free tax preparation and filing services and alternatives, including return-free filing,” it continued.

Reporting by ProPublica earlier this year found that tax preparation software such as TurboTax and H&R Block took steps to hide the programs from users, employing “deceptive design and misleading advertising to trick lower-income Americans into paying to file their taxes, even though they are eligible to do it for free.”

The letter said that if legislation is to move forward, it should ensure annual audits of the Free File program, screen companies for their compliance and prohibit companies from taking actions to limit awareness of the program.