The Internal Revenue Service (IRS) signed a new agreement with an alliance of income tax software vendors (TurboTax, H&R Block, etc.) that will allegedly make it easier for filers with simpler tax returns to file for free. Forbes has an article about it. The Wall Street Journal has an article (paywalled) about it.
The nonprofit newsroom ProPublica played a big role in getting this new agreement. ProPublica published several articles alleging that makers of tax prep software, especially TurboTax, tricked people into using its own pay products rather than sending them to the Free File Alliance. Also, ProPublica alleged that TurboTax, etc. hid the Free File Alliance from search engines. There is a grain of truth in this. It happened if the searcher used search terms such as {free file income taxes}, but it did not occur if "IRS" or "Alliance" were also included.
A class-action lawsuit was filed against Intuit, the maker of TurboTax. It was probably inspired by ProPublica.
I wrote about ProPublica's articles a few times, mostly in May 2019. The first one is here. It was clear to me that ProPublica's main goal was to smear Intuit, and that ProPublica's reporting was very deceptive.
1. ProPublica gave several examples -- some of real people and some pretend -- attempting to file for free using TurboTax's free version not on the Free File Alliance and learning they didn't qualify. Every time they ignored the caveats -- which could be read before using the software -- for using that particular free version.
2. The user in ProPublica's examples was always blameless; TurboTax got all blame.
3. ProPublica never tried to advise readers about how to find the Free File Alliance.
4. ProPublica never gave alternative ways of filing for free, e.g. the IRS's VITA program, AARP Tax Aide, or the IRS's Free File Fillable Forms.
5. ProPublica never explained that the free versions of TurboTax, etc. not on the Free File Alliance had been fit to the qualifying criteria for using Form 1040EZ, and that the IRS eliminated Form 1040EZ effective for the 2018 tax year.
This article about the new agreement features an interview with one of the major authors of the ProPublica articles. He says that only about 3 million filers use the Free File Alliance, whereas about 100 million filers are eligible to do so. Why the big difference? He doesn't offer an answer. Mine is that a lot of filers (1) don't have the computer skills, (2) use VITA or AARP Tax Aide*, (3) believe they lack the knowledge to use the software, (4) are very willing to pay for software, or (5) are very willing to pay another person to do the work and file for them. Contra ProPublica, I much doubt it is because TurboTax, etc. "hid" the Alliance and "tricked" filers. We will see how much the number of filers using the Alliance increases in the next couple years.
*About 5 million people combined use these.
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