IRS steps toward a new free-file tax return system have both supporters and critics mobilizing

WASHINGTON — An IRS plan to test drive a new electronic free-file tax return system next year has got supporters and critics of the idea mobilizing to sway the public and Congress over whether the government should set up a permanent program to help people file their taxes without needing to pay somebody else to figure out what they owe. An April AP analysis found that overall, Intuit, H&R Block, and other private companies and advocacy groups for large tax preparation businesses, as well as proponents in favor of electronic free file, have reported spending $39.3 million since 2006 to lobby on “free-file” and other matters. “An IRS direct-to-e-file system is redundant and will not be free – not free to build, not free to operate, and not free for taxpayers,” Plummer said, adding that it “will unnecessarily cost taxpayers billions of dollars.” H&R Block said in a statement the direct e-file pilot “continues to be a solution in search of a problem.” Citing the free-filing options for Americans under a certain income threshold through the existing Free File Alliance, H&R Block said, “this pilot is unnecessary and faces significant barriers to providing comprehensive tax preparation services.” H&R Block came under fire after congressional Democrats last week released a report stating that it was one of three large tax preparation firms that sent “extraordinarily sensitive” information on tens of millions of taxpayers to Facebook parent company Meta and Google over the course of at least two years. Susan Harley, Congress Watch managing director at Public Citizen, said “we’re outgunned as far as money being spent, but we have the moral higher ground” in supporting the free-file program over third-party tax preparers.