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NewsCut
Bob Collins

Report: Bipartisan effort seeks to deprive many taxpayers of free filing

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If you need more evidence that politicians are mere puppets for their corporate sugar parents, we give you ProPublica's Tuesday story about why you're not going to get to file your taxes electronically for free.

TurboTax's parent, Intuit, and H&R Block want your money. And politicians want theirs. It's the one thing Republicans and Democrats still have in common.

The two companies poured $6.6 million into lobbying to keep the IRS from setting up a free filing system because it jeopardizes the profits of the companies that make tax filing software.

Last week, the House Ways and Means Committee, led by Rep. Richard Neal, D-Mass., who got $16,000 in campaign contributions from the companies, passed the Taxpayer First Act, which makes several changes to the IRS and is sponsored by a Democrat and Republican in both the House and Senate.

As with most names given to congressional bills, it's a lie.

The Free File Alliance, a private industry group, says 70% of American taxpayers are eligible to file for free. Those taxpayers, who must make less than $66,000, have access to free tax software provided by the companies. But just 3% of eligible U.S. taxpayers actually use the free program each year.

Critics of the program say that companies use it as a cross-marketing tool to upsell paid products, that they have deliberately underpromoted the free option and that it leaves consumer data open to privacy breaches.

The congressional move would codify the status quo. Under an existing memorandum of understanding with the industry group, the IRS pledges not create its own online filing system and, in exchange, the companies offer their free filing services to those below the income threshold.

Consumers are already paying the companies for the software to prepare their taxes. Why should taxpayers have to pay to pay their taxes?

FMI: Free File (IRS)

Related: Free File providers scam taxpayers; Congress shouldn't be fooled (The Hill)