The sweeping domestic policy bill passed by the House and Senate last week mandates that the IRS study options to provide a free tax filing option for Americans. That study represents a threat to the for-profit tax prep industry dominated by TurboTax, a product of the Silicon Valley company Intuit. President Joe Biden said he plans to sign the bill, the Inflation Reduction Act, today, following the party-line vote in the House to approve it on Friday.
The bill provides $15 million to study how the IRS could implement such a program, how much it might cost and how Americans would view it.
The industry has tried to block or subvert a government free tax filing system for decades. ProPublica has reported for years on how companies have sometimes even tricked customers into paying for services that they should have gotten for free.
The last time the federal government attempted to provide free tax filing was back in 2002, under the George W. Bush administration. Back then, soon after the White House floated “an easy, no-cost option for taxpayers to file their tax return online,” Intuit and its lobbyists fought back hard. The result was a program that relied on Intuit and other private software providers to provide the service instead.
ProPublica’s story on Intuit’s 20-year campaign to prevent a government-provided tax filing service, the so-called Free File program was flawed from the start. Supposedly available to 70% of taxpayers, it only reached between 2% and 3% in recent years. After ProPublica reported that Intuit and others were intentionally making it harder for taxpayers to find the program online, there was renewed focus on Free File, including numerous investigations. The company stopped including code on its Free File website that made it harder to find the free version. Eventually, both Intuit and H&R Block, by far the largest providers, pulled out.
At a Senate hearing in June, Treasury Secretary Janet Yellen said “There’s no reason in the world that a modern economy shouldn’t have a system that makes it easy for such a large group of taxpayers to file their returns.”
There are a lot of small businesspeople who do not want the government deciding what form should be filled out on a government server…They want to retain the ability to decide what income to report voluntarily. This is not just Intuit in this fight. It is a larger part of our culture.
This isn’t about small business. This is about jerk-off politicians torturing their citizens. The government already has all the tax information for the majority of all payers. W-2, 1099s, etc. How stupid is it for you to fill out a form with the information they already have and send it back to them?
And yes, not everyone fits into that category but most people do. The people who don’t can fill out a tax return just as they do now. Otherwise, the IRS should send you a statement that you can agree with or amend. Anything else is citizen abuse.
Again with my husband, the Norwegian. His pension is akin to Social Security from Norway and that’s his only income, so he pays tax to Norway. He gets a text message telling him what his tax is and whether he’s overpaid or underpaid. First year he was here he was baffled by watching me go through tax season. And don’t get me started on his reaction to checks.
A similar situation with us. Although we’ve lived in the US since 1986, we have pensions from our years of working in England…both NHS and state pensions (similar to social security). We pay tax at source. Every year without fail we’ve gotten a surprise cheque for a few thousand dollars for our tax rebate…a rebate that we didn’t have to file a claim for.
Small business people are abusing their uncle. It is a big part of our culture. They voluntarily decide what to report. There are hundreds of thousands of small business people reporting.
Everyone kicks a politician. Just not their own politicians .