Washington, DC - United States Senators Sherrod Brown (D-OH), a member of the Senate Finance Committee, and Elizabeth Warren (D-MA) sent a follow-up letter to Internal Revenue Service (IRS) Commissioner Charles P. Rettig after new reports revealed that for-profit tax preparation companies in the Free File Alliance (FFA) continue to use tricks and traps to charge low- and moderate- income families fees to file their taxes, and that the IRS refuses to address the glaring failures that allow tax preparation companies to prioritize their profits over their commitment to providing a free filing option for low-income taxpayers.
"The IRS's continued refusal to police the bad faith efforts by participants in the Free File program to scam customers, which have now cumulatively cost millions of taxpayers millions of dollars, demonstrates that the only way for the agency to fulfill its commitment to free tax filing services for low- and moderate-income filers is to provide that service directly," the senators wrote.
FFA is a consortium of private tax preparation companies -- including Intuit, which owns the tax preparation software TurboTax -- that have an agreement with the IRS to provide free tax preparation services to taxpayers who qualify in exchange for the IRS not developing its own tax preparation software. However, according to reporting from ProPublica, Intuit has used design tricks known as "dark patterns" to push customers eligible for Free File into paying more to file their taxes by "tap(ping) into Americans' fear, uncertainty and doubt about the tax filing process."
Another ProPublica report revealed that in the fall of 2018 -- just days before the IRS Advisory Council was set to publish a "blistering" report concluding that "deficient oversight and performance standards for the Free File program put vulnerable taxpayers at risk" -- IRS officials secretly, after privately negotiating with FFA companies, extended the Free File program for a full year, with no public negotiations or discussions.
"These new allegations are the latest manifestation of Intuit's twenty year-long battle to prevent the IRS from providing services directly to taxpayers for free," the senators wrote. "As a result of these efforts, and aggressive lobbying, the IRS has given Intuit and the other FFA participants unprecedented control over the operation of the Free File program."
"Inexplicably, this supposedly objective investigation frames these serious problems disingenuously and in an overtly industry-friendly way, handing the IRS a guidebook for how to excuse and ignore the program's most egregious failures," wrote the lawmakers. "Despite Free File's serious and well-documented failures, the report makes the extraordinary suggestion that Free File has been a success."
Senators Warren and Brown requested responses from the IRS no later than November 27, 2019 about how the agency plans to fix the Free File program to address egregious abuses by FFA member companies, and additional information about the integrity of the evaluation the IRS commissioned to evaluate the program.
A copy of the Senators’ letter to the IRS can be found HERE.