IRS Free E File

 

Once again, we are looking at the end of 2024 coming quickly and soon, we will be preparing 2024 taxes.

As you know, taxes are not just an April 15th issue.  There is rarely any decision you choose to make or must make that does not affect your taxes.  That is why I am here 24/7 for you, applying the tax law to your situation in a complete and accurate manner and, most importantly, utilizing the tools to have you pay the lowest legal amount of tax.  My knowledge of your individual tax situation and circumstances gives you the confidence that we have filed correctly and in your best interest

The Internal Revenue has instituted a new program called Free-File.  Do not be misled.

The IRS Free File program is a Public-Private Partnership (PPP) between the IRS and the Free File Alliance, a coalition of leading tax preparation software companies.   IRS Free File partners are online tax preparation companies that offer what is called the “IRS Free File” program, which provides free electronic tax preparation and filing of federal tax returns at no cost to qualifying taxpayers (some may also offer free state returns).  The IRS Free File program PPP is not a traditional contractual arrangement; this partnership represents a balance of joint responsibility and collaboration that serves the interests of taxpayers and the Federal government.  The online tax preparation software partners are part of the  Free File Alliance, which coordinates with the IRS to provide free electronic federal tax preparation and filing to you.  This non-profit, public-private partnership is dedicated to helping millions of people prepare and file their federal taxes online for free.

The IRS does not endorse any individual partner company.

My fee includes my time and expertise, answering your questions and planning for all your tax filings.  It has remained commensurate with the services offered and the value provided.  I am focused on you and your tax situation throughout the year.

 

While your income may prohibit you from the use of IRS Free-File, be aware that if you choose to use this service, there is no tax planning or consideration for saving tax dollars made available.  IRS is just providing you software.

 

Also, many of you may remember what your mother told you, “you get what you pay for”.  Because this is a Free-File service you would think the service provided by the IRS costs the American Taxpayer nothing.  Wrong! 

 

The IRS will continue in 2025 with the Free-File Alliance.  The 2024 filing season had 140,803 taxpayers in 12 states file their taxes using Direct File.

Costly: Direct File would require hundreds of millions of dollars of taxpayer funds annually.

  • The IRS estimates Direct File will cost $64 to $249 million annually.
  • The Treasury Inspector General for Tax Administration notes, “Direct File cost estimates [by IRS] could not be substantiated.
  • The IRS’s estimate included costs associated with providing customer support, product development, i.e., labor costs, and technology, i.e., hosting fees, software licensing fees, etc.  Yet when the IRS was asked for documentation supporting how it arrived at these various cost estimates, it could not provide any.
  • Tony Scott, former CIO for President Obama, said: “The estimated costs of this project are very likely grossly understated, based on a sampling of other government software development projects.”

 

Where IRS Direct File falls short 

As part of IRS Direct File, there is a customer service option that offers – according to the IRS – very limited and general guidance.  Customer service does not have access to taxpayer information, and they cannot provide personalized advice.  This is where the tax professional’s expertise shines through – providing personalized advice and recommendations based on training, technology, and access to authoritative research.

 

Our firm and I am very respectful of our relationship and take great pride in offering you the best tax planning, preparation and representation available.  If you have any questions, please know I am here to serve you.

 

Sincerely,

Cris Nelson