It's tax season, and I'm getting ready to do my family's taxes. Every year I stubbornly do my own taxes, and mail them in by snail mail. Last year it took 9 months to get our refund. Am I tempted to buy tax software and e-file? You bet I am. But then I remember what I found out when I looked into the tax software situation.
It was ProPublica, bless their investigative journalistic hearts, that cracked the case of why, if you make less than $50,000, you can e-file for free, but if you make more than that amount, you have to buy their software to e-file your return. That's right; the IRS will only accept e-filing from tax preparation software you must buy. For most filers using typical tax forms, it's about $120, and ranges up to $200 or more. That sounds like highway robbery to me, and ProPublica's investigation suggests it exactly that.
Believe it or not, for most countries in the world, taxpayers file their taxes for free. ProPublica probed into Intuit, the parent company for TurboTax (and also a bit into H&R Block, the other big company in the business). Here's from ProPublica:
"Internal presentations lay out company tactics for fighting “encroachment,” Intuit’s catchall term for any government initiative to make filing taxes easier — such as creating a free government filing system or pre-filling people’s returns with payroll or other data the IRS already has. “For a decade proposals have sought to create IRS tax software or a ReturnFree Tax System; All were stopped,” reads a confidential 2007 PowerPoint presentation from an Intuit board of directors meeting. The company’s 2014-15 plan included manufacturing “3rd-party grass roots” support. “Buy ads for
op-eds/editorials/stories in African American and Latino media,” one internal PowerPoint slide states.
The centerpiece of Intuit’s anti-encroachment strategy has been the Free File program, hatched 17 years ago in a moment of crisis for the company. Under the terms of an agreement with the federal government, Intuit and other commercial tax prep companies promised to provide free online filing to tens of millions of lower-income taxpayers. In exchange, the IRS pledged not to create a government-run system.
"The IRS is seemingly the biggest threat to Intuit and other commercial tax prep businesses, but it has more frequently acted as the industry’s ally, defending the Free File program even in the face of critical internal reviews. The IRS declined to comment for this article.
"This year (2019), Intuit was close to realizing a long-held goal: enshrining the Free File program in law, effectively closing the door on the IRS ever creating a free tax filing system. But an outcry followed ProPublica’s reporting on the matter and Intuit’s treatment of its customers, prompting the provision to be dropped and state and federal investigations into Intuit’s practices. Yet even after this setback, the company remained steadfastly confident that its clout in Washington would win the day. “What we’re not gonna do is fight this publicly because that is exactly what they want us to do,” said Sasan Goodarzi, the new CEO, in a video released to staff this May and obtained by ProPublica. “We are actually working with the IRS and members of the Congress to ensure that the facts are very clear.” [Translation of that last phrase: "to ensure that the IRS NEVER offers free filing to most taxpayers".]
Read the whole thing--it will make your blood boil. So I will reluctantly sharpen my pencil and start my taxes and mail the darned things in. This is corruption and extortion, and I refuse to acquiesce to it.