The Internal Revenue Service has announced that tax filing companies with which it has agreements to offer free filing tools are barred from hiding those programs from consumers in online searches and must be transparent about where to find them on their sites. In other words, they’re now required to do the absolute bare minimum to make free filing easier for taxpayers.
The IRS announcement follows a series of excellent reporting by ProPublica on tax sins primarily carried out by TurboTax owner Intuit, as well as other companies, that were seemingly devised to work around an agreement they had with the IRS to offer free filing to qualifying taxpayers. Through lobbying efforts, shady filing procedures, and apparently intentional efforts to hide the free filing programs from search engines like Google, offending companies were able to continue profiting off of taxpayers who should have been able to file their taxes for free (those who make $US69,000 ($98,332) a year or less).
Moreover, a provision to the Taxpayer First Act would have prevented the IRS from developing its own easy-to-use filing system to compete directly with these ostensibly free and accessible filing offerings. That provision has since been nuked, per an addendum to the agency’s agreement with the tax filing companies under its Free File program. In addition, the companies are barred from intentionally scrubbing their free file programs from search, must standardize names for their programs to make them easier to find, and are required to point qualifying taxpayers to the Free File program landing page where necessary, among other changes.
H&R Block, a company that alongside TurboTax that was accused by ProProblica of intentionally masking its free file programs in search, did not respond to Gizmodo’s specific requests for comment about the changes but said in a statement by email that it continues “to support the IRS Free File program and will again participate in the program as recently amended for the upcoming tax season.”
TurboTax-maker Intuit did not immediately return a request for comment. The company did, however, post a blog post this week in which it said it “strongly supports these changes to the Free File program and associated Free File offerings because they increase the focus on the taxpayer experience.”
Intuit also used the opportunity to take a shot at reporting on its past practices, claiming it “is deeply committed to providing free tax preparation and filing for those who need it the most, despite attempts by some recent media coverage to suggest otherwise.” It’s pretty cute coming from a company whose CEO Sasan Goodarzi was heard in an internal video obtained by ProPublica last year claiming that Intuit’s code to hide its free file offering from search “was intended to be [in] the best interest of taxpayers so they were more fully informed about their options and could choose what they felt was best for them.”
In a statement this week, IRS Commissioner Chuck Rettig said the amendment to the agreement “continues to show the partnership we enjoy with the Free File partners and the commitment we both share in helping taxpayers since the program’s creation 18 years ago.”
“The improved process will make Free File stronger and give taxpayers another reason to consider this valuable software option,” Rettig added. “The IRS and FFI will also continue to work together to identify and explore ways to better help low- to moderate-income taxpayers and to pursue meaningful opportunities to enhance taxpayer awareness and use of the Free File Program beyond the 2020 filing season.”