Here’s something else that was in that tax bill. One I kind of glossed over.

And, I can guarantee that this provision- which is only a feasibility determination- if the IRS elects to proceed, there will be a LOT of screaming and yelling.  Not from me- I’m all for it.  But, Intuit (aka Turbotax),  Jackson Hewitt, H&R Block and a slew of other tax preparers are clearly not in favor of this idea at all.

By now, you are wondering what this is…

The IRS has $ 15 million to play with and discern if it can let certain folks file their taxes electronically- FOR FREE!

You can bet that this will be limited to those with simple taxes.  But, don’t despair, since that’s about 70% of US taxpayers; those who earn $73K or less a year. But, only about 3% of US taxpayers participate in the FreeFile program that the IRS and vendors have authorized.  (Don’t forget that some folks are terribly fearful they will make a mistake filing their taxes and run into big IRS problems, too.)

But, if your income is strictly from W-2, interest, and retirement sources, then your taxes are straight-forward.  (As a rule, we won’t do those taxes.  Because they are too simple- and we can’t lower our prices to offer such a service without upsetting our breakeven and profit considerations.)

Now, remember, the IRS  has the funding to do this feasibility study.  But, that’s not enough to bring it to the populace- it will cost lots more to develop a system that will integrate with the IRS databanks.  Moreover,  I don’t think the IRS has the clout- or the gumption- to buck the private lobbyists that will be launched by those firms mentioned above.

Don’t forget that this business segment is pretty big- on the order of $ 12 billion for this past tax year.  And, yes, Turbotax and H&R Block have offerings for free for those at the lower income thresholds, but they still get to control those folks (and offer them other services).  Over the past decade, these two firms have spent more than $ 60 million on lobbying for eFile and other issues, to ensure their continued profitable operations.

That $ 73K annual income threshold I mentioned above- that’s the threshold at which H&R Block and Turbotax cuts you off from free filing.  But, TaxSlayer, another participant in the IRS Free File program, terminates your filing for free if your income exceeds $ 39K.  (The price then goes from fee to about $ 30- or you need to reenter all your data on another’s system.)

It will be interesting to see what happens with this feasibility study.

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