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After TurboTax and H&R Block lobbying, IRS could be banned from offering free tax-filing app

After TurboTax and H&R Block lobbying, IRS could be banned from offering free tax-filing app
[Photo: Flickr user Mike Mozart]

Congress is likely to pass a law making it illegal for the Internal Revenue Service to develop a free tax-filing app, ProPublica reports.

The nonprofit investigative outlet has for years now tracked how companies that make money helping you do your taxes, like TurboTax-maker Intuit and H&R Block, have lobbied against a system where the IRS pre-fills part of your income tax forms.

Theoretically, the IRS would be able to do a fair bit of the work involved for many taxpayers, since their income is documented in tax forms like W-2s filed by employers and 1099s filed by banks and gig economy clients. But as Vox reports, that’s been opposed both by the big tax-prep companies and by anti-tax conservatives, who see the arduous return prep process as a reminder of the burden of taxation and also fear an IRS-made tax app would effectively bamboozle taxpayers into accepting default settings and failing to claim valuable deductions.

There are some free tax-prep services already available, including some run by tax giants like Intuit and H&R Block, through what’s called the Free File program. They’re often only available to consumers making less than $66,000 per year, however.

And as the Seattle Times recently reported, other companies such as Credit Karma have entered the free tax-prep game, using information from your tax returns to target sponsored offers for other financial products, like personal loans.

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