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Taxpayers Support the Free File Enhancement Act

November 29, 2007

Dear Member of Congress:

On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write to ask for your support of H.R. 3457, the Free File Enhancement Act. This important legislation would allow most taxpayers to submit their federal income tax returns online through an enhanced Free File public-private partnership. This plan would expand no-cost filing options for taxpayers while saving the Treasury billions of dollars and avoiding a government-run program fraught with potential conflict-of-interest and performance issues.

Here's how the new and improved system called for by H.R. 3457 would work: Taxpayers currently making $54,000 or less will still be encouraged to use the existing Free File system for free tax return preparation and e-filing. After 2007, all other taxpayers can use an online form-based system (managed by the IRS but provided by the private sector) and have their return e-filed at no charge. Participating providers would be prohibited from advertising additional products or services during the program's use, and they would have to meet good-business standards applied to other government contractors. Taxpayers who wish to file their own taxes, hire an accountant, or use some or other filing service, would still be able to do so.

During our nearly 40 years of serving as the voice for American taxpayers, NTU has supported internal IRS reforms and privately-offered services that have made tax filing a smoother process. The enhanced system set up by H.R. 3457 advances the interests of taxpayers while maintaining an important distinction of the IRS as a tax collecting -- not a tax preparing -- institution. Past proposals to create a cumbersome, federally-run tax filing system presents a conflict of interest (making the tax collector the tax preparer) that ordinary citizens have rejected as a bad idea, not to mention a costly one. Estimates of a federal return system run over a billion dollars in the ten-year window. If past IRS technology "upgrades" are any guide, taxpayers would likely be stuck with a delayed, over-budget, and unresponsive system. H.R. 3457 avoids this by putting the proven experience of the private sector to work for taxpayers.

The outlook for the 2008 tax filing season is becoming more complicated every day that Congress fails to pass important tax relief patches. Our members strongly urge you to address this situation by quickly passing H.R. 3457, the Free File Enhancement Act.


Kristina Rasmussen
Director of Government Affairs