This came from the Vox web site
Congress is set to make it illegal for the IRS to create free tax preparation software, software that could save millions of Americans from wasting their money on TurboTax, H&R Block, and other tax preparers currently profiting from the IRS’s failure to help taxpayers.
ProPublica’s Justin Elliott reports that the Taxpayer First Act, sponsored in the House by Democratic Rep. John Lewis (GA) and Republican Mike Kelly (PA), and in the Senate by Finance Committee Chair Chuck Grassley (R-IA) and Ron Wyden (D-OR), would prohibit the IRS from creating an online tax preparation system that would compete with TurboTax and H&R Block.
As Elliott explains, this provision is a long-held priority of those tax preparers, who have spent massive sums of money ($6.6 million just last year) lobbying Congress to keep taxes complicated and prevent the IRS from simplifying the process.
The IRS could prepare taxes automatically for the vast majority of Americans for whom it has all the required information. The bill, Elliott reports, would bar the IRS from the much more moderate step of creating software that competes with TurboTax.
The bill, with its truly Orwellian name, passed the House Ways and Means Committee on a bipartisan basis on April 2. The committee chair, Richard Neal (D-MA), said in a statement that the bill will “protect low- and moderate-income taxpayers.”
There are some signs of opposition as the bill goes to the full House for passage. Dan Riffle, policy director for Rep. Alexandria Ocasio-Cortez (D-NY), correctly identified the bill as a massive giveaway to the tax preparation industry:
But barring a larger movement to kill or amend the bill, the provision is headed for passage.
I know companies offer so called free tax preparation software. But it is not really free. They sell or use your information to make money.
I am not aware of any opinions about this bill from the presidential candidates. Maybe some other daily kos members have heard some opinions from the declared candidates or potential candidates.
You may want to contact your representative and ask them to vote against this bill.
Update:
The Taxpayer First Act of 2019, which would redesign the Internal Revenue Service, passed the full House on Tuesday, 4/9/2019
The legislation would also make it illegal for the IRS to create free tax preparation software.
Sen. Ron Wyden, D-Ore., ranking member on the Senate Finance Committee, said in a statement after the vote that “again and again in my service in the Senate I have battled the tax-preparation software industry to simplify filing taxes for the typical American. In fact, the industry spent millions to fight my proposals in two tax-reform bills to allow a ‘simple return,’ which would require the IRS to send any American a pre-filed tax return on request using the agency’s tax information.”
Added Wyden: “During the debate on the tax administration bill, my staff pushed back on a prohibition on the agency competing with private tax preparation services, and I will continue to push for my proposal for the pre-filed ‘simple’ return and the principle that a taxpayer should not have to use a private company to pay their taxes online.”
The final package, Wyden said, “reduced the role of private debt collection on the most vulnerable Americans and made a permanent a highly successful program for low-income taxpayers.”
There may be some good items in the bill.
Too late to contact your house members. You can still contact your senate members to request that they add Senator Wyden’s proposal to require the IRS to send you a pre-filled return on request.
Thursday, Apr 11, 2019 · 2:05:39 PM +00:00
·
clinical12
Update number 2
Some people have noted that the IRS links them to free “private tax prep software”, usually that works if the tax return is straightforward and one makes less than $66,000. Yet, it is not really free. Those companies make money by using your online information and they store your sensitive financial information. Some of those private tax prep companies are foreign limited liability companies. Just look them up. This step is increasingly unnecessary. The IRS has your tax documents and runs a version of your return anyway to check it. They just cannot make it available to you for free like they do in other countries.
Here is the alternative:
Denmark and Sweden, both small countries, operate tax agency reconciliation systems. About 87 percent of Denmark’s taxpayers and 74 percent of Sweden’s had their returns filled out by the tax authorities in 1999. Spain, Estonia, Finland, Norway, and Iceland have also implemented tax agency reconciliation systems.
In a tax agency reconciliation system, taxpayers who choose to do so provide the tax authority with basic information. The tax authority then calculates tax liability from this information and from information it receives from employers, financial institutions, and other payers.