Big Tax Prep’s Sneaky Game: The Battle for Free Tax Filing

Ever wonder why filing taxes isn’t as simple as it seems? Well, pull up a seat, because the latest tea involves Senator Elizabeth Warren and Rep. Katie Porter spilling the beans on the tax prep giants trying to block your right to a free and easy tax filing experience.

Picture this: The IRS is on the verge of launching a game-changing pilot program that could provide broad free tax filing. Sounds dreamy, right? A world where the U.S. joins its European neighbors in making tax filing quick, free, and painless. But not so fast! Tax prep bigwigs like Intuit and H&R Block are breaking a sweat, lobbying hard to nip this initiative in the bud.

Warren and Porter aren’t here for these tactics. They’ve openly criticized these companies, revealing the shady history of how they’ve been sidelining broad-based free tax filing to ensure their cash registers keep ringing. Let’s not even get started on how these tax prep firms were allegedly sharing sensitive taxpayer data with Meta. Yes, Meta.

The Free File program, which sounds like a taxpayer’s dream, has been around for two decades. It was meant to let many of us file our taxes without spending a dime. But according to our watchdogs, Warren and Porter, it’s been “utterly failed,” thanks largely to, you guessed it, the lobbying of tax prep firms. The stats are grim: Although 70% of taxpayers can use the Free File service, a measly 2% took advantage of it in 2022. Why? Tax prep companies have been craftily directing folks away from these free options and into their paid services.

Need some evidence? Back in 2019, an investigation unveiled that Intuit’s TurboTax was playing hide and seek, keeping its IRS-partnered free file program hidden from search engines. The company even decided to skip the IRS program in 2021, marketing their “free” products which led to a lawsuit from the Federal Trade Commission. Talk about drama!

And the spending on lobbying? A whopping $39.3 million since 2006 to keep free filing at bay. With the IRS’s new, expansive free filing pilot looming, these companies are back to their old tricks, bringing on lobbyists faster than you can say “tax deduction.”

Warren and Porter are demanding these firms to lay their cards on the table – revealing the bucks they’ve raked in from average earners and the extent of their lobbying shenanigans.

Closing on a fierce note, our representatives declared, “The IRS’ creation of a free, government-run direct filing tool would benefit taxpayers and rein in the predatory and exploitative behavior of tax prep companies.” And honestly? We’re here for it.