Bipartisan Senate and House lawmakers are calling for IRS accountability regarding its Free File program amidst controversy currently surrounding the IRS’s partnership with Free File Alliance participants.
Allegations Regarding Free File Options
Certain tax preparation companies under the Free File Alliance partnership with the IRS have recently come under fire for allegedly hiding the availability of free file options for low-to-middle income taxpayers.
Bipartisan Letter to IRS Commissioner
Senate Finance Committee (SFC) Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., urged IRS Commissioner Charles “Chuck” Rettig in a May 6 letter to thoroughly review the allegations regarding the Free File program. The bipartisan letter marks the latest effort of Senate and House lawmakers related to the program over the last two weeks, all of which have pressed the IRS for answers concerning the allegations.
“Once the IRS has completed its review of these allegations, we request that you review the IRS’ memorandum of understanding with the program’s participants (known as the “Free File Alliance”) to ensure industry compliance, and take any necessary actions to ensure the integrity and purpose of the Free File program, including amending the memorandum as necessary to bar whatever deceptive acts and practices the IRS might uncover as a result of its investigation,” Grassley and Wyden wrote.
Low-to-Middle Income Taxpayers
Approximately 70 percent of U.S. taxpayers are eligible for the free-of-charge, online tax preparation service, according to a May 7 SFC press release. However, “far fewer” taxpayers use the free service than are eligible, Grassley and Wyden said.
IRS Team to Review Free File Program
The IRS released a statement last week noting that it has assembled a senior leadership team to review the Free File program and will “take fast action to ensure the integrity of the program.” Additionally, the Treasury Inspector General for Tax Administration (TIGTA) has announced that it, too, will investigate the allegations related to the Free File program.
A copy of Grassley and Wyden’s May 6 letter to Rettig can be located here.