IRS updates Free File agreement to make free tax-filing software easier to access

The Internal Revenue Service has signed a new agreement with Free File Inc., formerly known as the Free File Alliance, after controversy erupted during tax season this year over the difficulty of finding free versions of consumer tax filing software like TurboTax.

A series of articles by the investigative news site ProPublica exposed problems with the Free File program, which is supposed to allow taxpayers who earn under $69,000 per year to file their taxes for free using commercial software. However, ProPublica found that some vendors such as Intuit were making it difficult to find the free versions of their software through search engines like Google and consumers were oftentimes being steered toward paid products instead, even if they should have qualified for the free software.

The new agreement announced Monday aims to make the Free File program more taxpayer-friendly while strengthening consumer protections in several key areas.

"This updated agreement is part of a larger effort by the IRS to help taxpayers meet their tax obligations," said IRS Commissioner Chuck Rettig (picured) in a statement Monday. "It continues to show the partnership we enjoy with the Free File partners and the commitment we both share in helping taxpayers since the program's creation 18 years ago. The improved process will make Free File stronger and give taxpayers another reason to consider this valuable software option. The IRS and FFI will also continue to work together to identify and explore ways to better help low- to moderate-income taxpayers and to pursue meaningful opportunities to enhance taxpayer awareness and use of the Free File Program beyond the 2020 filing season."

Andrew Harrer/Bloomberg

Any taxpayer earning $69,000 or less is able to find one or more free commercial software products available by visiting IRS.gov/freefile instead of going through a search engine. The program also offers Free File Fillable Forms, a fillable version of the IRS's printed forms that can be used by taxpayers who already have experience in preparing returns by hand and need limited assistance. The Free Fillable Forms program is available to anyone regardless of income, and it will be available again in the 2020 tax season for taxpayers filing their tax year 2019 returns.

These aspects of the program have been available for years, although the maximum income level tends to rise annually, but the new agreement aims to make the Free File software more easily accessible. Under the new agreement, tax software vendors who are part of the Free File program won’t be allowed to exclude their Free File landing page from an organic internet search. They have agreed to ensure a link on their sites is available to return taxpayers to the IRS Free File website at the earliest feasible point in the preparation process if they don’t qualify for the Member's Free File offer. They have also agreed to regularly survey taxpayers who have successfully e-filed a tax return through the Free File program and will report their results on a quarterly basis to the IRS.