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BUSINESS Monday 17 February 2020
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Free tax filing has confused many Americans. Here's help.

SARAH SKIDMORE SELL 2014, although the agen- website at IRS.gov/freefile.
AP Personal Finance Re- cy does promote it on its Changes have been made
porter website, social media and to the internet search rules
The majority of individual in press releases. For their but for good reason. Last
taxpayers in the U.S. are part, some companies say year, an estimated 14 mil-
eligible to file their taxes on- they promote the program. lion people who were eli-
line for free, yet many may TurboTax said increased gible for Free File ended
be unaware or confused advertising and other ef- up paying to have their
by how to do so. forts boosted Free File us- taxes prepared and filed,
The tax industry and the IRS age last year. according to the Treasury
have played a part in the The Taxpayer Advocate, Inspector General's report.
problem. Together they which represents the tax- By going to the IRS site, tax-
run the IRS Free File sys- payer's voice within the payers can browse all the
tem, which about 70% of IRS, has been critical of the offers or use a tool to help
taxpayers are eligible for IRS' management of the them find the right prod-
but only a sliver use. It was program, saying it fails "to uct. Each program part- This Feb. 13, 2019, file photo shows multiple forms printed from
designed to help low- and promote the best interest ner has different eligibility the Internal Revenue Service web page that are used for 2018
middle-income taxpayers of taxpayers," noting the standards, but the IRS as- U.S. federal tax returns in Zelienople, Pa.
find a reliable program to low usage and confusion sures taxpayers that if their Associated Press
file at no cost and boost among taxpayers. adjusted gross income was
online filings. However, the Additionally, critics say $69,000 or less, they will find qualifies for Free File. So, if cost.
IRS has long faced criticism taxpayers may find them- at least one free product to you've input all your infor- Taxpayers whose income
for its failure to promote selves confused between use. mation and find you do not is over $69,000 can use the
and support the program. the Free File system and the Taxpayers should not be meet the criteria, you may Free Fillable Forms, which is
And recent media reports free or low-cost versions of- charged any fees if they be pointed toward a paid an electronic version of IRS
uncovered efforts by the fered by the tax prep com- qualify, other than poten- service to complete your paper forms. These forms
tax software preparation panies themselves. tial state tax preparation taxes. do the math for the tax-
industry to misguide users of Last year, the nonprofit fees. Some programs offer Not sure if you've got the payer, but there are limited
Free File and nudge them news organization Pro- free state filing as well. real deal? The IRS also now directions so the user must
into paid products. Publica found that some Free File partner company requires that each com- be comfortable complet-
Subsequently, improve- of the companies added websites are also prohib- pany name their Free File ing their taxes indepen-
ments have been made code to their websites that ited from pitching and sell- service the same way. It dently. Paper forms, while
and Free File should be hid their Free File programs ing additional products to should appear as IRS Free not a popular option, are
easier to use in 2020. But, from search engines and users, including offers of File Program delivered by completely free as well.
with tax season getting into diverted users to paid prod- refund anticipation loans, (Company Name). The tax software providers
full gear, users should know ucts. Outside investigations checks or other such prod- DO I HAVE TO USE IT? offer their own options and
the details of the service confirmed that at least five ucts. There are plenty of other millions of people use these
and the alternatives. companies did have cod- However, not everyone alternatives for filing at no with success.q
WHAT IS FREE FILE? ing that prevented users
The IRS Free File program from getting to the proper
allows taxpayers whose page. The companies cit-
adjusted gross income is ed in the reports have de-
$69,000 or less to file for free. nied any wrongdoing.
Tax software prep compa- While the companies' ac-
nies administer Free File via tions didn't violate their
a partnership with the IRS. agreement with the IRS,
This year, taxpayers have the agency has barred
their choice of 10 provid- the companies from hiding
ers, including well-known their free products, among
names such as TurboTax, other changes to their
H&R Block and TaxSlayer. agreement.
Free File has been avail- The IRS and the Free File
able since 2003; but while Alliance, a coalition of tax
roughly 70% of taxpayers prep companies that work
are eligible, only about 2% in the partnership, say they
use the program, accord- are committed to making
ing to the National Taxpay- future improvements to the
er Advocate's Office. program.
WHY THE LIMITED APPEAL? The cost to file online with
Critics say the program is a tax software preparation
confusing and difficult to company varies depend-
use. The process taxpay- ing on the complexity of
ers must follow is "obscure someone's tax situation, if
and complex," according they are filing state returns
to a report released earlier as well, or if they need pro-
this month by the Treasury fessional assistance. It can
Inspector General for Tax range from around $30 to
Administration. well over $100.
The program is also poorly WHAT SHOULD I DO?
promoted. The IRS has not First and foremost, know
allocated any money to this: The only way to access
advertise Free File since Free File is through the IRS