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E-filing

Warren Bill Would Require Free IRS Tax Filing Program

Jeff Carlson  

Jeff Carlson  

Sen. Elizabeth Warren, a Massachusetts Democrat, has reintroduced legislation mandating the IRS to provide its own free online tax filing services and move away from its partnership with private online tax preparation companies—a program that taxpayers have largely ignored.

The legislation follows years of issues with the Free File program, which was outsourced by the IRS to the tax preparation industry and serves about 3% of taxpayers even though 70% are eligible. The measure would also allow taxpayers better access to their own tax records retained by the agency.

“The average American spends 13 hours and $240 every year to file their taxes—that’s too much time and too much money,” Warren said in a statement. “This is the result of corporations like Intuit sabotaging the Free File program to rake in large profits.”

Warren’s bill would call on the IRS to develop a free, online tax preparation and filing service that would allow all taxpayers to prepare and file their taxes directly with the federal government instead of having to share private information with third parties. The measure also prohibits the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services.

The legislation would enhance taxpayer data access by allowing all taxpayers to download third-party-provided tax information that the IRS already has into a software program of their choice, saving time and decreasing the risk of math errors on Forms W-2 income or child tax credit (CTC) payments that lead to significant processing delays. The measure directs the IRS to expand the CTC nonfiler tool to cover other tax benefits, especially the earned income tax credit, by March 1, 2023.

The bill picked up co-sponsors since its last introduction in 2019 and now has 22 Democratic senators pledging support. California Democratic Reps. Brad Sherman and Katie Porter led introduction of a version of the measure in the House of Representatives.

 

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