tax szn
April 9, 2019

Another controversial wave of tax reform is headed through Congress — not that either political party seems to find it too controversial.

Last week, the House Ways and Means Committee pushed a bill full of IRS overhauls through to the full chamber, with both Rep. John Lewis (D-Ga.) and Rep. Mike Lewis (R-Pa.) as co-sponsors. And inside the jam-packed bill, there's a provision that would make it illegal for the IRS to create its own tax-preparation service, likely limiting the ways people can file their taxes for free, ProPublica reports.

Several developed countries' tax agencies have created their own free online filing systems, prompting experts to suggest the IRS do the same, ProPublica notes. But as it stands, the agency only offers free filing via for-profit companies such as TurboTax and H&R Block for people making less than $66,000 per year. Only about 3 percent of Americans eligible for free filing actually use it, the Free File Alliance claims. That's likely because, as critics say, companies "deliberately underpromot[e] the free option" and instead "use it as a cross-marketing tool to upsell paid products," ProPublica writes.

If the IRS created its own filing service, it would cut into these companies' profits, and they know it. So filing services including H&R Block and TurboTax parent company Intuit and have spent years lobbying against a free, public system, ProPublica continues. The Taxpayer First Act passed last week with bipartisan support, showing that their lobbying worked — and that the bill is likely to pass the entire House pretty soon. Read more at ProPublica. Kathryn Krawczyk

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