| The Washington Post - Free Filing, Pitch-Free |
| Sunday, 31 December 2006 14:00 |
|
The Internal Revenue Service and private tax preparers have agreed that the Free File electronic-filing program will be offered for 2006 tax returns without solicitations for refund loans -- which sometimes carry high interest charges and fees. The IRS said the Free File Alliance, a coalition of makers of tax-preparation software that make filing software available free, would no longer include side offerings such as "refund anticipation" loans in their programs. Read More The Internal Revenue Service and private tax preparers have agreed that the Free File electronic-filing program will be offered for 2006 tax returns without solicitations for refund loans -- which sometimes carry high interest charges and fees. The IRS said the Free File Alliance, a coalition of makers of tax-preparation software that make filing software available free, would no longer include side offerings such as "refund anticipation" loans in their programs. Such loans let customers immediately take home the expected refund amount. But consumer groups have complained that some loans come with high interest rates and fees. "We heard many legitimate concerns about the marketing of ancillary products during the last filing season," IRS Commissioner Mark W. Everson said in a statement. "This is a constructive step." The head of the Free File Alliance, Tim Hugo, said that with the voluntary elimination of the loan pitches, "the Free File Alliance takes another giant leap forward on behalf of the taxpaying public." The IRS said its data showed that only 0.5 percent of Free File users requested a refund-anticipation loan last year in filing their 2005 tax returns. The Free File program enters its fifth year this month. It is available to taxpayers who earn $52,000 or less, about 70 percent of all returns. Taxpayers must enter Free File through the IRS Web site, www.irs.gov. About 3.8 million taxpayers used the Free File program this year, still a small percentage of the 70 million taxpayers who filed returns electronically. Under the agreement, the alliance can still offer to prepare Free File users' 2006 state tax returns for a fee. |