Free File lawsuit follow-up
Saturday, November 17, 2007
I've been searching for responses from the tax software companies named in the class action lawsuit filed against Free File Alliance corporate partners (more on the legal action in this earlier blog post).
Not surprisingly, there's nothing official on any of the major company Web sites. It's a cliche, but I'm sure the truth, that the companies' lawyers are all poring over the documents and have mostly muzzled spokespeople.
However, I did find a few reply reports and, in the interest of fairness, wanted to share them.
Tim Hugo, executive director of the Free File Alliance (this link takes you to the Alliance's Web site, not the IRS filing portal), said the suit was "totally without merit."
"This suit is so riddled with inaccuracies, you would think it was written by a first-year law student," Hugo told the Kansas City Star.
The Star is the hometown newspaper of defendant H&R Block, but the company wasn't talking even to the local guys. The paper reported that -- wait for it -- a company spokesperson said Block had not reviewed the lawsuit yet and declined to comment.
I'm sure lawyers for Intuit, maker of tax software leader TurboTax, also haven't fully dissected the suit, but that company did have a few words about the situation anyway. Intuit spokesperson Julie Miller used virtually the same phrase as did the Alliance in describing the lawsuit: "wholly without merit."
"The IRS Free File program is a pro-consumer, public service program where the government and the software industry work together to make free federal online tax preparation and e-filing services available to 95 million eligible U.S. taxpayers of low to moderate income," Miller said in a statement e-mailed to WebCPA. "There are no fees for federal tax preparation and e-filing services through the Free File program, nor is marketing or cross-selling of other things permitted."
Since the legal wheels roll so slowly, nothing at all will happen before the 2008 e-filing season kicks off in about two months. And the IRS has already posted word about the coming Free File option.
Free File still on schedule: According to the agency's Free File Web page, taxpayers who earn $54,000 or less in 2007 will be eligible to use the filing option beginning in mid-January.
Congress has kicked around an e-filing tax credit in previous sessions. The basic idea would be a nominal credit of $15 to $20 for all taxpayers who must pay to file electronically to cover that cost.
Since lawmakers and the IRS are so intent on making the service as electronic as possible (see this previous post for a preview of IRS ideas in this regard), maybe it's time to revive that idea.
It should stifle cost complaints and hold us over until we get a direct, free file for all option from the IRS.
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