via NPR:
The IRS is developing a system that would let taxpayers send electronic returns directly to the government for free, sidestepping commercial options such as TurboTax.
The agency plans a pilot test of the program next year.
Many other countries already offer taxpayers a government-run filing system. But the IRS plan is likely to face stiff opposition from the $14 billion tax-preparation industry.
“A direct-to-IRS e-file system is wholly redundant and is nothing more than a solution in search of a problem,” said Rick Heineman, a spokesman for Intuit, the company behind TurboTax. “That solution will unnecessarily cost taxpayers billions of dollars and especially harm the most vulnerable Americans.”
Americans already spend significant time and money preparing their taxes. The average individual filer pays $140 per year, according to the IRS.
While an alliance of industry players offers a free-filing option through the IRS website, only about 2% of taxpayers use it.
“That’s because the tax prep companies sabotaged the program, so they could keep raking in money,” Sen. Elizabeth Warren, D-Mass., said last month.
Last year, TurboTax paid $141 million to settle a complaint that it advertised free tax preparation, then steered customers into costly upgrades. The company did not admit to any wrongdoing.