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Strengthening the Free File Program

News, Taxpayer Empowerment

Today, the IRS announced meaningful reforms that strengthen the IRS Free File program through an addendum to the Memorandum of Understanding (MOU) between the IRS and the Free File Alliance (FFA), which is an organization made up of 10 private companies. The Free File program is a public-private partnership that provides free tax preparation and filing services for eligible lower-to moderate-income taxpayers at no cost to the taxpayer or the government. The reforms in the addendum address the Free File program and member companies’ Free File offerings.

Intuit strongly supports these changes to the Free File program and associated Free File offerings because they increase the focus on the taxpayer experience. We applaud the IRS and FFA, who worked together to bring about these important reforms. 

We believe a strong Free File program benefits taxpayers, empowering eligible individuals and families to manage their own finances through the preparation and filing of their taxes at no cost to them or the government. Be it through IRS Free File, state Free File, Volunteer Income Tax Assistance Program (VITA), Tax Counseling for the Elderly (TCE), military assistance or commercial free tax preparation, Intuit has for decades supported free tax preparation options and has filed more absolutely free tax returns than all other tax prep software companies combined.  

The addendum to the Memorandum of Understanding can be found HERE, with select Free File program reforms applicable to Free File offerings highlighted below:

  • Eliminates language that bounds the federal government not to enter the tax return software and e-file services marketplace. An original objective of the Free File program was to encourage private industry investment in technology and services to deliver on IRS goals of increasing e-filing. With approximately 90% of taxpayers e-filing today, the language is no longer relevant and is not a prerequisite for Intuit’s continued participation in the Free File program. Critics of the program came to believe that this language was the only thing stopping the IRS from offering tax preparation software and assistance, and that companies participated in Free File only in exchange for this promise. That is wrong, and we support removing the language that fostered this confusion. We are confident in our exceptional product, and we participate in the Free File program to help give eligible taxpayers another option to file their taxes for free. 
  • Requires companies to include a link to take taxpayers back to for those that begin tax preparation in a company’s Free File offer but are found not to be eligible for that offering so they can explore other Free File options for which they may be eligible. This is a practice Intuit has had in place for the last 2 tax seasons. 
  • Establishes clear rules for online search. The MOU establishes clearly defined rules for online search practices. For the first time, FFA members are prohibited from engaging in any practice that would cause a Free File offer landing page to be excluded from an organic internet search. Intuit’s search and marketing practices already conform with the new addendum requirement. 
  • Requires surveys of customers who file through the IRS Free File program to measure their satisfaction. This is a practice Intuit strongly supports. Customer satisfaction research is part of our ongoing business practices for our tax offerings. 
  • Provides the IRS the total count of all free federal tax returns filed with commercial products (non-Free File). Last tax year, approximately 13 million completely free tax returns were filed with Intuit software, of which 1.2 million filed with Free File and more than 11 million filed with TurboTax Free Edition, our commercial offering. This more comprehensive accounting for free tax preparation will help ensure visibility to the large number of taxpayers who file online for free, outside of the Free File program. 

Along with the other FFA members, Intuit will work with the IRS to lead implementation of these measures as quickly as possible.

The addendum also reaffirms the longstanding agreement between the IRS and FFA concerning participating companies’ obligations under the Free File program and their freedom to operate with commercial free and paid offerings outside of it. This includes affirming the IRS’ responsibility to market and promote Free File to taxpayers. Much of the recent criticism of the program has been premised on a misunderstanding of the agreement underpinning this successful public-private partnership. 

Intuit is – and for two decades has been – deeply committed to providing free tax preparation and filing for those who need it the most, despite attempts by some recent media coverage to suggest otherwise. Our tax preparation products were used completely free by approximately 13 million filers last tax season and 55 million taxpayers over the last 5 years.

We will continue to look for ways to empower all American taxpayers so they can privately and securely prepare their own taxes and receive every dollar they earn and deserve. Today’s reforms to the Free File program are a meaningful step forward.