Paul L. Caron

Tuesday, April 23, 2019

Ventry Presents Free File: A Story of Agency Capture Today At Georgetown

VentryDennis J. Ventry, Jr. (UC-Davis) presents Free File: A Story of Agency Capture at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Lilian Faulhaber:

The IRS Free File program and the Free File Alliance (FFA) harm taxpayers. Meanwhile, the IRS refuses to conduct any meaningful oversight over the program or FFA companies, thereby failing to protect taxpayers and exacerbating an already abusive program.Worse, Congress wants to make Free File a permanent part of the Internal Revenue Code, obligating the IRS to partner in perpetuity with FFA companies and their abusive tactics. ...

Each year, I encourage my tax students to use Free File to file their federal income taxes. (I also encourage them to use CalFile, California’s truly freee-filing web-based software, for their California income tax returns and to avoid being upsold state filing services from FFA companies.) I also warn them about the upselling and forced arbitration and likely impermissible use and disclosure of their tax return information. Armed with this knowledge, they become savvy consumers of FFA companies’ purportedly free products. Also armed with this knowledge, they can report back and chronicle the abuses of the system, which they have done for years. This year was no exception. ...

Below we examine how the Taxpayer First Act (TFA) obligates the IRS to sponsor Free File in perpetuity and, relatedly, how it effectively prohibits the IRS from offering a free alternative to Free File. Second, we will explore how and why the IRS refuses to monitor the Free File program and to ascertain whether FFA companies are complying with the terms and conditions of the MOU. 

See also Who Profits When You Pay Your Taxes? (April 22. 2019)

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