The House passed a bill banning the government from creating 'free' tax-preparation software like TurboTax, forever
- The House of Representatives on Tuesday passed the Taxpayer First Act, which includes a provision that would bar the Internal Revenue Service from creating a free electronic tax-filing program.
- Many of the lawmakers shepherding the bill through the House Committee on Ways and Means have benefited from campaign donations from tax-preparation companies like H&R Block and Intuit.
- The bill also has a Senate companion.
- Visit BusinessInsider.com for more stories.
WASHINGTON — The House of Representatives on Tuesday passed a bill that includes language that would permanently bar the Internal Revenue Service from creating a free electronic service for Americans to file their taxes, advancing a primary objective of the industry of for-profit companies like Intuit and H&R Block.
The bill passed by a voice vote after being led through the House Committee on Ways and Means by a bipartisan group of lawmakers, many of whom have benefited from campaign donations from for-profit tax-preparation companies.
The Taxpayer First Act includes a handful of reforms for the IRS. But in the bill, cosponsored by Republican Rep. Mike Kelly of Pennsylvania and Democratic Rep. John Lewis of Georgia, is a provision that bars the IRS from making its own free version of tax-preparation software.
Companies like Intuit — which produces TurboTax — and H&R Block allow most Americans to file for free as long as they earned less than $66,000 for the year. But most eligible Americans don't take advantage of that, with just 3% filing for free.
The bill, if it becomes law, would ensure that the system continues — a longtime goal of major for-profit tax-preparation businesses.
H&R Block and Intuit have made big campaign donations to some of the members of the House Financial Services Committee and the Ways and Means Committee.
In 2018, H&R Block donated to the campaigns of the provision's leading sponsors, Kelly and Lewis, as well as of 11 of the 25 Democrats on the Ways and Means Committee, including its chairman, Rep. Richard Neal. H&R Block gave to nine of the 17 Republicans on the committee, including its ranking member, Rep. Kevin Brady.
Neal also received a sizable chunk from Intuit, which in 2018 gave his campaign $6,500, along with donations to dozens of other lawmakers.
The bill has a companion in the Senate, which also has a bipartisan component barring the IRS from developing its own electronic tax-filing system. The Senate's version is sponsored by Democratic Sen. Ron Wyden of Oregon and Republican Sen. Chuck Grassley of Iowa.
In a statement, Grassley pushed back on the assertion that the IRS would not be allowed to let Americans file taxes for free.
"The Taxpayer First Act of 2019 would continue the IRS Free File Program, which is important to many lower-income and middle-income taxpayers. Nothing in the legislation would prevent the IRS from continuing to provide online assistance to taxpayers or develop new online options to help taxpayers," he said. "Arguments to the contrary aren't based in fact and rely on either misunderstandings or misleading special interests. The provision at hand requires the IRS to continue the Free File Program, which was originally developed in the Bush administration, extended by the Obama administration and continued by the Trump administration."
"Congress has supported the program and the provision in the Taxpayer First Act puts that support into statute. It certainly doesn't ban IRS from helping taxpayers file their taxes," he added. "That's just false."
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