Intuit Quits IRS Free File Program: What That Means For TurboTax Users

Intuit Quits IRS Free File Program: What That Means For TurboTax Users

Angela Lang / CNET

Intuit, the company behind TurboTax tax filing software, announced on July 15 blog post that it would no longer participate in the IRS Free File Alliance, a partnership between the IRS and the tax filing software industry that offers Free Tax Software for Americans Earning $ 72,000 or less.

Intuit cited the “limitations of the Free File program” and a desire to focus on “continuing to innovate in ways not allowed under current Free File guidelines” within the free program as a catalyst for its exit. Under the agreement governing the program, participating companies cannot market paid products to those using free file solutions.

In addition to tax services, the company says it is focused on pilot programs to help clients save money, pay off debt and increase their income. An Intuit spokesperson told CNET that the company was “committed to continuing to offer free tax preparation while accelerating innovation to address all of Intuit’s consumer financial problems.” TurboTax Free Edition It is the most widely used free tax preparation offering in the industry and will continue to be available to more than 50 million people filing simple tax returns. “

While we are not aware of all the ways Intuit’s departure from the Free File Alliance will affect current Free File customers, the IRS program, or the 2021 tax season (coming in 2022), we have received some details from the company. . Read on to learn the backstory of the Free File Alliance, what is changing for Intuit Free File users, and the remaining options in the IRS Free File program.

What is the Free Filing Alliance?

Before his departure, Intuit was a member of the Free File Alliance for nearly two decades. During this time, the company, together with H & R block and other members of the Alliance – aggressively lobbied Congress to stop the IRS from creating its own free tax filing system. The Free File Alliance members argued that competing with the IRS would constitute “an ongoing competitive threat to our business“that”it could potentially have material and adverse revenue implications.“

His efforts paid off in April 2019 when the Ways and Means Committee of the United States House approved the First act of the taxpayer, in which the IRS agreed not to create its own system, as long as the group of tax filing companies provided free services to qualifying taxpayers.

The bill was passed following the publication of a report in April 2019. ProPublica article, which reported that Intuit had intentionally used deceptive marketing and website design known as “dark pattern” Internet tactics to alienate contributors from the Free File program and into paid products. That December, the IRS filed a new tax declaration agreement that prevented companies from hiding free products in Internet searches. It also lifted the ban on allowing the IRS create your own “This updated agreement is part of a larger IRS effort to help taxpayers meet their tax obligations,” IRS Commissioner Chuck Rettig said in a news release. Intuit publicly supported the changes.

Still, only a fraction of eligible taxpayers use free solutions. According to a federal review, less than 3 million used the Free File program in 2019, although more than 100 million taxpayers were eligible.

If the free edition of TurboTax is still available, what exactly has changed?

In an email, an Intuit spokesperson told CNET that the company plans to expand the benefits of using its TurboTax Free Edition to “complete financial health in taxes and beyond.” Such an extension of services was not possible under IRS Free File rules, according to Intuit.

“TurboTax Free Edition is a different product than TurboTax donates for free tax preparation through the Free File program,” the spokesperson said. “Intuit’s Free File program offering is called IRS Free File delivered by TurboTax. They’re pretty similar, but the Free File program guidelines don’t allow us to do things like provide our filers with a completely free advance on their refund if they need money. faster to pay bills. “

I filed taxes using IRS Free File delivered by TurboTax. What happens to my data now?

Intuit did not immediately respond to CNET’s questions about user data for 2020 returns filed through the Free File program. The company website describes how to request copies of personal data, change your marketing preferences, and delete your data from its servers.

What are my free tax software options now?

Several leading tax software providers offer tax filing services at no cost if your income level is below a certain threshold and your filing is simple. Credit Karma Tax provides free state and federal filing for 2021, and H & R block offers a free option for W-2 taxpayers and those who have collected unemployment in the past year.

Despite Intuit’s exit from the program, several free file options remain available for contributors with an annual adjusted gross income of $ 72,000 or less. The IRS program now includes eight participants:

And if you make more than $ 72,000 per year, you are eligible to use the program Free File Fillable Forms – electronic versions of IRS paper forms, although they do not include preparation assistance.

What other free tax preparation resources are available?

Depending on your income, age, and other factors, you may qualify for free tax preparation and filing from one of these federal programs:

  • Voluntary assistance with income taxes. VITAE is a federal grant program that provides free tax preparation services to low and moderate income taxpayers earning $ 57,000 or less per year, people with disabilities, and people with limited English speaking skills.
  • Tax Advice for the Elderly (TCE). The TCE The program offers free filing and tax help for seniors age 60 and older with regard to pensions and retirement taxes.
  • The Department of Defense offers service members and their families free tax resources, including H&R Block software, as well as financial and legal advice. MilTax participates in the VITA program and consultants are available by phone, live chat, or in person at the nearest military base.

The IRS oversees the VITA and TCE programs, which have IRS partners and certified volunteers who must pass tax law training that meets or exceeds IRS standards. Tax returns receive a quality review from the IRS before filing.

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