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Why The Free File Alliance Is Bad For Taxpayers
It’s tax day, and some taxpayers may still be struggling to finish their returns or contemplating filing for an extension. The classic picture of a harried citizen crouched over a paper return frantically erasing numbers is out of date thanks to the advent of e-filing, but the use of online filing methods has brought with it a new problem for tax administration: the Free File Alliance (FFA). Many taxpayers may not be aware of how the FFA is working to make it both more expensive and harder to file.
The FFA is a group of software makers that have contracted with the IRS to provide e-filing options to the public. The IRS was mandated by law to move toward electronic filing and, of course, it outsourced its obligation. The FFA is headlined by Intuit INTU +0.78%, the makers of TurboTax, but other prominent members include Liberty Tax Service and H&R Block HRB -0.14%. The alliance is technically organized as a nonprofit, but the various members are operated on a very much for-profit basis. Most taxpayers who visit the IRS’s website to try to file their returns electronically will be referred to a page where they must pick an individual free file member. It is very difficult to even find other options for filing. (It’s even more difficult to locate non-FFA options on various state websites, including Virginia’s and the District of Columbia’s.)
The FFA is a group of software makers that have contracted with the IRS to provide e-filing options to the public. The IRS was mandated by law to move toward electronic filing and, of course, it outsourced its obligation. The FFA is headlined by Intuit INTU +0.78%, the makers of TurboTax, but other prominent members include Liberty Tax Service and H&R Block HRB -0.14%. The alliance is technically organized as a nonprofit, but the various members are operated on a very much for-profit basis. Most taxpayers who visit the IRS’s website to try to file their returns electronically will be referred to a page where they must pick an individual free file member. It is very difficult to even find other options for filing. (It’s even more difficult to locate non-FFA options on various state websites, including Virginia’s and the District of Columbia’s.)
[link:http://www.forbes.com/sites/taxanalysts/2014/04/15/why-the-free-file-alliance-is-bad-for-taxpayers/|
I file on paper still.