The IRS tax preparation program, which allows citizens to use certain corporate tax preparation software for free, will be extended through 2029, the agency announced Wednesday.
Participating software companies in 2024 include Tax Act, Online Taxes, Tax Hawk, and On-Line Taxes.
“Free File remains an important part of the IRS portfolio, allowing taxpayers to file their taxes for free,” IRS Commissioner Danny Wuerffel said in a statement Wednesday. “We are pleased to see the growth of our program this year.”
Two of the largest corporate tax preparation companies, H&R Block and Intuit, which created the popular Turbo Tax software, withdrew from the Free File program in 2023, specifically as the tax preparation industry faced legal scrutiny for fraudulent practices.
intuition Paid $141 million The company used Free File to steer low-income customers away from legally mandated free application options to paid services to resolve claims in a class action lawsuit brought by nine states.
“Intuit defrauded taxpayers of their hard-earned money by asking consumers to pay for tax preparation services that were supposed to be free,” Pennsylvania Attorney General Michelle Henry said last year. said. “Intuit’s deceptive conduct and aggressive advertising campaign were unnecessary and unlawful, especially when the IRS offers free tax preparation services to eligible consumers.”
The IRS offered taxpayers their own tax preparation software option for the first time this year. This is a program known as Direct File, which is now available in 12 different states and is currently being considered for possible expansion.
The IRS announced Wednesday that hundreds of thousands of taxpayers have signed up for Direct File accounts and 140,803 taxpayers have filed taxes with the new system.
The program had limited functionality and could only process wage income, not capital income.
It could only process a few commonly used tax credits, such as the child tax credit and the earned income tax credit, and could not process 1099-K forms, which are often used by independent contractors and “gig economy” workers.
Wages, salaries, and tips are taxed by the IRS as follows: 99 percent efficiencyOn the other hand, business owner income, capital gains income, and pass-through income are all taxed less accurately by the IRS.
The IRS and Treasury Department are currently considering expanding the Direct File program in the future, even though Republicans have voted to eliminate it completely.
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