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Free IRS software for filing taxes to be banned by US Congress in win for TurboTax

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The private tax-preparing industry has lobbied heavily to keep the IRS from developing the programme

Congress is poised to pass a bill that would hand a major policy victory to the for-profit tax preparation industry, just in time for Tax Day in America.

The bill, titled the Taxpayers First Act, is a wide-ranging bill that includes a provision that would ban the US government from developing a free electronic tax filing system, and is supported by companies like Intuit, the maker of TurboTax, and H&R Block.

Those companies have lobbied Congress for years now to block the Internal Revenue Service (IRS) from developing a free system to help taxpayers file online and would compete with their product, sinking a combined $6.6m into efforts related to the bill just last year.

The passage of the provision would safeguard the profits of the private tax preparation corporation, which experts say run a system that makes filing taxes more difficult than it needs to be.

“This could be a disaster. It could be the final nail in the coffin of the idea of the IRS ever being able to create its own program,” Mandi Matlock, a tax lawyer with the National Consumer Law Centre, told ProPublica.

The legislation received a major boost last week after the House Ways and Means Committee voted to advance the legislation.

It has bipartisan support in that committee, where it is co-sponsored by Democratic Representative John Lewis and Republican Representative Mike Kelly.

Some 70 per cent of Americans qualify to use free tax-preparer programmes run by the companies in question, but just 3 per cent of eligible taxpayers use the service, according to the Free File Alliance, a private industry group.

The new bill is expected to preserve those circumstances, which critics say allows the companies to purposefully under market their free services.

https://www.independent.co.uk/news/world/americas/us-politics/turbotax-irs-software-tax-filing-ban-a8864236.html