IR-2018-213, November 2, 2018
WASHINGTON — The Internal Revenue Service announced today an agreement with the Free File Alliance that will strengthen and expand taxpayer options for people choosing to use the free online software program during the 2019 filing season.
The agreement updates several areas designed to make the Free File program more taxpayer friendly while strengthening consumer protections in several key areas.
“The Free File program is a great example of a public-private partnership, and it’s been a clear success since its creation 16 years ago,” said IRS Commissioner Chuck Rettig. “But more needs to be done to improve this important program, and these new changes will make Free File stronger and give taxpayers another reason to consider this valuable software option.”
The IRS and the Free File Alliance agreed to revisit key components of the program to strengthen consumer protections and parts of the program. The changes extend the existing memorandum of understanding by one year to Oct. 31, 2021. The agreement is being announced now to allow the software community time to implement the changes for the start of the upcoming filing season.
Each year, approximately 12 Free File partners, acting through the Free File Alliance, offer their software free to eligible taxpayers. Any taxpayer earning $66,000 or less — could find one or more free commercial software products available by visiting IRS.gov. Some providers offer both free federal and free state tax preparation. Active duty military personnel with incomes of $66,000 or less may use any Free File software product of their choice without regard to the criteria.
Since the program’s inception 16 years ago, taxpayers have filed more than 53 million free federal tax returns. The IRS estimates this means a savings of more than $1.6 billion to taxpayers, using a conservative $30 per return preparation fee.
The program also offers Free File Fillable Forms, a fillable version of the Form 1040 best suited for taxpayers experienced in preparing returns by hand and who need limited assistance. The Fillable Forms program, which is available to anyone regardless of income, will be available again in the 2019 tax season for people completing their tax year 2018 returns.
Highlights of the new agreement reached on the Free File program include several features designed to make the program more taxpayer friendly by fine-tuning the guidelines Free File partners must follow when presenting related information to taxpayers on their own websites and related communications to former and prospective users. Highlights include:
- Removing the “value-add” button from Free File partner landing pages. Free File members will remove any button or link on their Free File landing pages that would take taxpayers to non-Free File programs. The change is designed to reduce confusion, emphasize and make clear to taxpayers what is included in the Free File program.
- Taxpayers will be automatically returned to the IRS Free File page if they don’t qualify for an offer. To use Free File, taxpayers must use IRS.gov to connect to a company offering Free File. If the taxpayer doesn’t qualify for a free filing option on a particular member site, the new agreement requires the companies to send the taxpayer back directly to IRS.gov to see if they qualify for another Free File offer.
- Returning taxpayers’ first option must be Free File. If a taxpayer returns to a Free File member’s website the following year after using the free program, the first option after logging into their account must be to use the Free File option — before receiving any other offers from the company.
- Follow-up emails to taxpayers who used Free File the previous year will welcome them back to Free File service. This change will strengthen rules for members sending follow up emails to prior year taxpayers / customers, reminding them of the availability of Free File. To help increase program participation, Free File members will email prior year participants about the continuing availability of Free File prior to the start of the filing season. The email cannot contain information about any non-Free File service or product or any marketing or soliciting, except for free or paid state tax preparation offers.
- Emphasis on the in-place review process. Both the IRS and a third party already review each Free File option before filing season to ensure the program standards are being followed by Free File members. The new agreement now reinforces this longstanding requirement, which has always included an unannounced review during filing season.
“These steps will help further protect taxpayers and make a good program even better,” Rettig said. “The IRS is committed to improving the Free File program and continuing to make this a great option for taxpayers to consider when they are preparing their taxes.”