Tax preparation industry pushes back against IRS pilot program

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Tax preparers are pushing back against the IRS's plan to launch a pilot program for a free agency-run electronic filing system that directly threatens their industry. H&R Block said the e-file pilot “continues to be a solution in search of a problem.”

The IRS announced the move on Tuesday. The agency said it has built a “functioning internal prototype” of the tax filing tool and intends to launch a pilot program sometime next year. The announcement faced immediate blowback from Republicans about privacy and oversight concerns, and tax preparers are arguing such a move is redundant and costly.Tax preparation giant H&R Block said in a statement that the direct e-file pilot “continues to be a solution in search of a problem.

“Today, 100% of American taxpayers can file their taxes absolutely free of charge — this is free for them and the government. An IRS direct-to-e-file system is redundant and will not be free — not free to build, not free to operate, and not free for taxpayers,” the spokesperson said. “A direct-to-IRS e-file system is a solution in search of a problem, and that solution will unnecessarily cost taxpayers billions of dollars.

“In any case, this is a really big foot in the door for the IRS to move for directly preparing returns, and that would be a huge whack to these companies,” Baker said. Buhl told the Washington Examiner that, given their breadth of technical experience, it is important to listen to the concerns and hesitations of tax preparers. He added that advocates need to be careful assuming the IRS can so easily move into this space.

Grover Norquist, founder of the powerful low-tax advocacy group Americans for Tax Reform, told the Washington Examiner on Wednesday that handing over so much control of taxes to the IRS raises serious privacy concerns.

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