Shares of Intuit closed approximately 1% lower Tuesday while shares of H&R Block closed about 3% lower. With more than 30 organizations already offering free tax preparation, this pilot is unnecessary and faces significant barriers to providing comprehensive tax preparation services.” The costs estimated in the study to build, operate, and maintain are laughable.”Īt H&R Block, the company said the upcoming pilot “continues to be a solution in search of a problem. “The study ignores the harm a government-run system will have on vulnerable taxpayers and the true costs to taxpayers. “The report released by the IRS is not grounded in reality,” an Intuit spokesperson said. It’s a conflict of interest and inefficient for the IRS to collect Americans’ taxes, enforce tax laws and also prepare income tax returns, the companies have said. Tax preparation companies like H&R Block and Intuit, the owner of TurboTax, are opposed to the IRS getting into the arena of tax preparation. While the IRS determines how to implement the test run, it will likely need to prepare for criticism. That includes commercial tax-preparation software, he noted. “Direct file - whether it’s in its pilot phase, or whether a decision is made to go forward more broadly than that - will be just an option for taxpayers,” Werfel said. Treasury Secretary Janet Yellen directed the IRS to launch the pilot program after reading the report, Werfel noted. Tax-prep companies have criticized IRS free-filing proposal The tax agency is just in testing mode - like any company testing a potential product’s functioning and demand, he said. The upcoming pilot does not necessarily mean the start of a new IRS-run filing system, Werfel emphasized. If the IRS does decide to press ahead with a more widespread direct-filing system, it could cost between $64 million and $249 million annually, depending on variables such as the number of users, the study projected. There’s consumer appetite for an IRS-run free filing choice and a prototype used by some consumers “exceeded their expectations in terms of ease of use and simplicity,” the study said. Of that sum, $15 million was put aside to study whether the IRS could or should run its own filing option. The IRS is receiving $80 billion over a decade from last summer’s Inflation Reduction Act to upgrade services and step up high-end tax enforcement. (Werfel said the agency will still have to work out how state returns would get handled in the pilot program.) IRS Commissioner Danny Werfel announced the upcoming pilot program on the heels of a new IRS study saying the agency might be able to pull off its own income-tax return filing platform, even though it would not be an easy lift or come cheap. The IRS received more than 134 million electronically-filed tax returns through early May, and over 62 million were self-prepared while more than 72 million came from tax professionals, statistics show. Factor in business returns and that average tax-prep increased to $250. During the last tax-filing season, people spent an average of $140 and approximately eight hours preparing their taxes, according to IRS estimates.
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