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Congressman John Lewis backs bill barring IRS from offering free tax filing services

The bill would bar the IRS from developing its own online tax filing service.

Just before Tax Day, lawmakers from both sides of the aisle are working to pass a bill that would keep the IRS from offering its own free software to do your taxes. On the surface, it appears that this proposed measure would make it harder for people to do their taxes, but the bill’s sponsors, including Georgia Congressman John Lewis (D-GA), say it’s not that simple.

The Taxpayer First Act has passed the House and is currently before the Senate for consideration. It would stop the IRS from creating its own free tax-prep software, leaving most taxpayers to turn to paid products from companies and services like TurboTax and H&R Block.

Why would lawmakers want to stop a free tax tool?

According to ProPublica, there is already a formal agreement with the private tax industry group in place. Within the agreement, the IRS promised it wouldn’t create its own filing system and, in exchange, private companies would offer free filling services to those who make under $66,000 per year. The Taxpayer First Act would make that deal permanent.

Critics say the corporate tax lobby is influencing lawmakers, claiming that if the IRS offers free software, it could put private companies out of business. The Washington Post reported that the IRS also already offers low-income taxpayers a program to file for free – but only 2 percent of eligible people use it – because most people don’t know about it.

Congressman Lewis also pointed to the proposed measures other benefits – like improved tax filing services, protections during tax enforcement and simplifying the tax filing process – making it a more appealing process for taxpayers.

A spokesperson for Congressman Lewis told the Washington Post that other lawmakers who object the bill were persuaded to see that stopping the bill on one issue would likely kill other, more pleasing parts of the legislation – including protections from private debt collectors and millions of dollars in program assistance for low-income taxpayers.

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