Suppressed internal emails reveal that the IRS actively helped tax-prep giants suppress Free File

America is one of the only wealthy countries where you have to pay someone to prepare your tax return; in most other countries, the national tax office prepares a return for you and if it looks right to you, you just sign it and return it (you can always prepare your own return, too, or pay someone else to do it).

This has created billions of dollars in annual revenue for the tax-prep industry, which is hyper-concentrated and dominated by a couple of giant firms, notably Intuit (Turbotax) and H&R Block. These companies have engaged in years of aggressive lobbying to prevent free tax filing in the USA, agreeing to a "bargain" in the form of "Free File," through which free tax prep is provided by the big companies, but in a way that is so deceptive, riddled with dark patterns, and obfuscated that almost no one uses it (they also lobbied successfully to ban the IRS from advertising Free File's existence).

As part of its outstanding reporting on Free File, the IRS and the tax-prep industry, Propublica put in public records requests for emails between the IRS and the tax-prep industry's government relations people and lobbyists, only to have the IRS refuse to release them — until Propublica successfully sued them and forced them to hand over the documents.

It's easy to see why the IRS didn't want these emails released. They show a consistent pattern of tax industry shills "bargaining" to offer less and less to the American public, putting more and more limits on the usefulness of Free File, while the IRS — charged with regulating and overseeing these companies — rolls over and rubber-stamps each of these proposals, never making a counteroffer on behalf of the American people.

Notably, the IRS fails to push for any of the measures its own advisory council said were necessary. What's more, the emails show tax prep execs complaining to the IRS and seeking to have advisors sidelined, fired, or ignored.

The emails are striking for what they lack: no counterproposals or efforts by IRS officials to push for a better deal. Less than two weeks after the industry proposal, the IRS official who oversees the program, Ken Corbin, signed a new memorandum of understanding.

The new deal reflected all of the industry's proposals and contained no other significant changes. And it had been extended, just as the industry requested, to Oct. 31, 2021.

A spokesman for the Free File Alliance said in a statement that the group had discussed proposed changes with the IRS "for many months" before its push for changes last October.

"The notion that the Free File Alliance 'dictated' the terms … to the IRS is absolutely false," the spokesman said. "When IRS decides on any issue, the agency gets what it desires. No one dictates to IRS."

The IRS Tried to Hide Emails That Show Tax Industry Influence Over Free File Program [Justin Elliott and Paul Kiel/Propublica]

(via Webshit Weekly)

(Image: Phil Catterall, CC BY-SA, modified)