The US House of Representatives passed a bill on Tuesday containing amendments to the Internal Revenue Code with one amendment criticized as aiding tax preparation services such as TurboTax and service providers like H&R Block.
HR 1957, titled the “Taxpayer First Act,” passed the House by voice vote. The bill includes provisions changing the management of the Internal Revenue Service (IRS) to enhance customer service and improve the appeals process for taxpayers. The bill also makes improvements in identity theft protection, upgrades to electronic systems and information technology, and gives taxpayers more rights during the enforcement process.
The most controversial provision is Section 1102, the IRS Free File Program. 1102(a)(4) states that “The IRS Free File Program shall continue to work cooperatively with the private sector to provide the free individual income tax preparation and … electronic filing services.”
Critics such as Congressman Sean Casten (D-IL) believe that provision prevents the IRS from creating a free filing system of its own. Senate Finance Committee Chairman, Senator Chuck Grassley (R-IA) argued, “othing in the legislation would prevent the IRS from continuing to provide online assistance to taxpayers or develop new online options to help taxpayers.” Grassley also commented on the Act at a hearing with the IRS Commissioner. Grassley is one of the Senators introducing the bill in the Senate along with fellow Senate Finance Committee Ranking Member, Ron Wyden (D-OR). Wyden also believes that the bill does not prohibit the IRS from creating a free filing system, releasing a statement commenting on that issue and tweeting, “IRS has the authority to set up a public program allowing taxpayers to file their returns directly for free. I’ll block any legislation that would change that.”
Others like Congressman Mike Kelly (R-PA) have not commented on the issue and lauded the legislation as a bipartisan effort to benefit the taxpayers. Kelly commented, “To protect the integrity of our voluntary tax compliance system, the IRS should be a resource for Americans, not their adversary.”
The bill must next be approved in the Senate and signed by the president in order for it to become law.