Tax Day 2019 is almost here and if you’re looking to file your taxes online for free, then you’re in for bad news.
The for-profit tax industry has lobbied hard for years to stop IRS from creating a free electronic tax filing system and it will realize its goal before the tax day 2019. The bill is supported by both congressional Democrats and Republicans.
The Bill
Last week The Taxpayer First act was passed, the bill covers a wide range of changes to the IRS which is sponsored by Reps. John Lewis
One of many provisions in the bill bars IRS from creating its in-house online system for tax filing. This means, instead of filing taxes online for free on Tax Day 2019, the taxpayer has to rely on companies like Intuit which charge for their services.
IRS tax filing system was supposed to be free which would have hurt the monetary gains of the industry.
In their support Free File Alliance, a group funded by the industry claims that around 70% American citizen who pays tax is eligible to use the third party system for free. People whose annual income is less than $66k are eligible.
A member reported to HuffPost that if IRS develops software or any online tax filing system, it will present a continuous threat to their business in the future.
The IRS promises of not creating their own online tax filing system but in return companies, links have to provide free tax filing services to the taxpayers for Tax Day 2019.
Criticism of the Bill
Even though Free File Alliance claims that 70 % of the American taxpayer is eligible for free service, only 3% of this lot use the service.
Critics of the bill suggest that the industry knowingly underpromoted the free tax filing online option to the users. Some also criticized the IRS move as it failed to create its own filing system. There are several countries around the world that provide free online tax filing system to their taxpayer sponsored by the government.
The industry has heavily spent money on lobbying. Companies like H&R and Intuit dropped around $6.6 million while lobbying to close the IRS deal.
