Under pressure from Congress and the IRS, H&R Block has decided that 100 percent of its tax products and services, including its TaxCut software, will now include free federal electronic filing.

Intuit recently made the decision to offer free 1040 e-filing for all users of its TurboTax consumer desktop software in response to a request from Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee (see Intuit to Offer Free 1040 E-Filing Next Year). Intuit and other members of the Free File Alliance had been offering free electronic filing to taxpayers with adjusted gross income of $54,000 or less in 2007, but the IRS has been encouraging them to open up free e-filing to more taxpayers.

Liberty Tax Service also has reportedly expanded free 1040 e-filing to all taxpayers through its eSmartTax service, but still charges for state e-filing, according to AccountingWeb.com.

Block, however, claimed that over 95 percent of its more than 20 million U.S. tax clients already pay no e-filing fees at all. The company eliminated all e-filing fees in more than 13,000 of its offices starting in tax season 2002, and its online tax programs include free e-filing "at every level of entry," according to the company.

Now, in response to Intuit's decision to provide free e-filing to all TurboTax customers, regardless of income level, all of Block's TaxCut desktop software products will also include free federal e-filing. In addition, H&R Block has eliminated all e-file fees in its TaxWorks professional tax preparation software for tax year 2007. Intuit has yet to eliminate e-filing fees for its professional products, such as Lacerte.

Schumer (pictured) praised Block's initiative. "I am pleased to see that H&R Block is taking up the mantle of reform by banning all separate e-filing fees for all of their products, including tax software and in-store services," he said in a statement. "It is my hope that by next tax season all of the major tax software and tax preparation companies will follow suit and that e-filing will be free for all taxpayers, regardless of how they file their returns."

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