The current tax filing system in the United States relies on private services. A new bill is being pushed through Congress which would permanently block the government, the IRS in particular, from offering free online tax filing services to citizens. The bill would thus enshrine the existing system of reliance on private services into law.
There has long been a debate about why the government doesn’t just offer a simple self-run option which lets citizens file taxes online. It could simplify the entire process by basically filling out the tax forms of citizens and then sending along the refund. However, lobbying from the private tax service industry has prevented these efforts from really taking shape.
The bill, titled Taxpayer First Act, would block the IRS from providing a competing service to private online filing services such as TurboTax. The bill has received bipartisan support and was passed by a House of Representatives committee last week. A campanion bill has also been introduced in the Senate.
As ProPublica points out, the existing system is based on an agreement between the IRS and the private tax service industry. As part of this agreement, the latter provides some free services to citizens.
The bill is going to make this system permanent as lawmakers said in a statement that “This provision codifies the existing Free File program and requires the IRS to continue to work with private stakeholders to maintain, improve, and expand the program.”
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