(NewsNation) — In an ongoing effort to prevent the Internal Revenue Service from offering a free, direct tax filing service, TurboTax is now claiming it will harm Black taxpayers, according to ProPublica, which has been reporting on the issue for years.
Few enjoy filing taxes, and the chore is especially complicated in the U.S. which, unlike other countries, does not offer free filing for those with simple taxes or even direct electronic filing. One reason for that has been consistent lobbying campaigns from tax preparation firms and software companies that profit off the complex system.
This year, however, the IRS announced it would launch a pilot program to test a free, direct filing option that would not require taxpayers to use a private tax company to file electronically. Those who wish to file paper taxes can still mail those directly to the agency.
Intuit, which owns TurboTax, is one of those companies. ProPublica has reported on Intuit’s history of working against the idea of easy, free tax filing for Americans. The latest claim from Intuit is that such a filing would cause disproportionate harm to Black Americans.
Intuit previously backed out of a public-private partnership that allowed taxpayers to use free versions of popular tax software to file online and prohibited the IRS from creating its own direct e-filing option.
ProPublica investigated the latest campaign, including numerous op-eds and articles suggesting research has shown that a direct e-filing option would harm Black taxpayers. The news outlet, however, found that researchers said no such thing.
While Black taxpayers are audited more often, researchers attributed that to higher poverty levels, making them more likely to claim the earned income tax credit, which makes their returns more likely to be audited.
ProPublica attributed the IRS focus on auditing ETC filers rather than wealthy taxpayers who often take advantage of a number of factors, including cuts to the IRS budget and pressure from Republican lawmakers.
Meanwhile, the Federal Trade Commission has filed a fraud lawsuit against Intuit after investigating the company for deceptive advertising. According to the FTC, Intuit advertised free filing with TurboTax but aggressively steered users toward paid options instead.
The IRS hasn’t announced who will be eligible to file directly under the pilot program, but some in Congress have already moved to stop it.
A Republican-backed bill in the House would prohibit the IRS from creating a free, public, direct e-filing option while also reducing money for the agency’s enforcement budget after it announced it would be cracking down on wealthy taxpayers who don’t pay their fair share.
