Tuesday, April 11, 2006

Free File Isn't That Free

So the IRS has a program called Free File whereby taxpayers who make less than $50,000 can e-file their taxes for free using a third-party vendor. Except maybe free isn't always free. For a second year in a row, I grew frustrated with several wasted hours on H&R Block before I chucked the computer for the good ol' paper and pen (ok, not quite - I did fill my tax forms online with Acrobat, but then printed them out and will postal mail them). It appears that at least H&R Block wants to be confusing, forcing you constantly to consider abandoning the Free File for time with a consultant. Amazingly, it's a lot easier to figure things out by reading the tax booklets (never thought I'd live to say this!)

The IRS' refusal to provide an e-file platform is senseless. MSNBC reported Bert DuMars, IRS director of electronic tax administration, giving his interpretation of Congress statutues was "that IRS should stay out of the tax software preparation business." Sure, no one wants the IRS to hire software programmers to manage this work. But the IRS can, for a very small amount of money, hire a third-party vendor to manage this free platform. My state, Virginia has done this, and I must say, even given that state taxes are a lot simpler than federal tax returns, it was a pleasure to finish filing your taxes and pay your shortfall in all of 5 minutes!

Appears to me like some firms are seeing healthy returns on their lobbying investments, while the average taxpayer gets screwed!

1 comment:

SnarkyKitten said...

Free file means you get free help from a private company. Then they'll try to convince you pay them to do your state taxes.