The government’s dependence on private tax preparation websites is also impeding the distribution of monthly payments to families with children under a new federal program.

Intuit makes money charging for what should be a free service. The federal review estimated 14 million Americans paid for a tax prep program in 2019 even though they were eligible to use a free version of the same program. But it is saving that money at the expense of taxpayers. The companies say the government is saving money by staying on the sidelines. In 2019, ProPublica reported that Intuit added lines of code to the free version of its TurboTax website so that the site would not appear in search results on Google. Indeed, dogged reporting by the journalism nonprofit ProPublica has shown the ways that Intuit, in particular, tried to steer people to pay for tax preparation. They’d rather charge people for the same service. The companies, naturally, aren’t trying either. The I.R.S., starved for funding, has not paid to advertise the Free File program since 2014. But in 2019, the last year for which data is available, only 2.4 percent did so, according to a federal review. Seventy percent of taxpayers are eligible to use it. In exchange for the agency’s promise to do nothing, the companies agreed to offer free versions of their tax preparation software to most taxpayers.įor the last two decades, that Free File program has failed to serve most Americans.

To make the government’s surrender politically palatable, the tax prep industry signed a deal with the I.R.S. In 2002, the Bush administration scuttled a plan to create an “easy, no-cost” system for filing taxes online after fierce opposition from that coalition of the unwilling. has joined the resistance at critical moments, fearing that it will receive new responsibilities without new funding. They have won support from anti-tax zealots like Grover Norquist who say that making it easier to pay taxes would also make it easier to raise taxes. Tax preparation companies loudly protest the unfairness of the government undercutting profits by making it easier to deal with the government. In the United States, a strange coalition has repeatedly prevented the creation of a similar system.

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