Warren blasts tax companies for heel-dragging on federal free file tax program

Taxes for Trading


It’s tax time, and Senator Elizabeth Warren has a challenge for some of the biggest tax prep companies around.

News today shows Warren accusing Intuit, the owner of TurboTax, of “extensive lobbying and adroit influence peddling” in undermining something called the Free File program set up for low-income taxpayers.

The Free File program was supposed to provide less wealthy households with free annual filing options for returns that are usually fairly simple compared to those of high net worth taxpayers.

According to the reporting from Kim Lyons at The Verge, Warren accused the tax companies of hiding the free software and deceiving low-income filers into using paid products.

In criticizing a revolving door system, Warren described the company’s approach as “outright sabotage” of the program.

Here’s how Intuit responded, according to Lyons’ coverage:

“Intuit strongly believes that Americans should be at the center of their financial life and is proud to have helped more taxpayers file their taxes for free than all our competitors combined. Over the past eight years alone, Intuit’s free tax preparation offering has helped nearly 100 million Americans file their taxes completely free of charge. We are clear and fair with our customers and open and transparent about our advertising practices, and our participation in the Free File program was done in compliance and with the oversight of the IRS. We are reviewing the letter from Sen. Warren and other policymakers and will respond.”

All of it dances around the issue that politicians have been talking about for decades – the confusing complexity of American tax law, and the ways in which it challenges low-income filers.

Stimulus payments are a case in point. Although the general stimulus is supposed to be a non-adjusted financial benefit for filers, the child tax credit awarded this past year was based on 2020 income, and can be amended for filers who ended up earning more in 2021.

That in itself has created a lot of consternation as we approach this year’s tax deadline. What do you think about reforming our tax system?