Why Isn't TurboTax Part of IRS Free File Anymore?

For years, TurboTax has been a staple in the tax preparation industry, offering a range of services to help individuals and small businesses file their taxes. However, as of 2020, TurboTax is no longer part of the Internal Revenue Service's (IRS) Free File program. In this article, we'll explore why this change occurred and what it means for taxpayers.

'Turbotax Caster 2020'

The IRS Free File program was established in 2002 to provide free tax preparation services to eligible individuals with incomes below $69,000. The program allowed partnering tax software companies, including TurboTax, to offer their services at no cost to participants. However, in recent years, the relationship between the IRS and these companies has become strained.

In 2019, the IRS announced that it would be ending its partnership with TurboTax and other major tax software providers due to disputes over fees and revenue sharing. The decision was met with widespread criticism from taxpayers and lawmakers alike, who saw it as a betrayal of the public trust.

So, why did the IRS and TurboTax part ways? One major factor was the fee structure. Under the previous agreement, TurboTax charged users a fee for using its services, which was then split with the IRS. However, in recent years, TurboTax has increased its fees significantly, leading to complaints from taxpayers who felt they were being taken advantage of.

Another issue was revenue sharing. The IRS had long been unhappy with the way TurboTax and other tax software providers handled refunds and credits. According to some reports, TurboTax would charge users extra fees for certain services, such as audit support or additional forms, which the IRS argued was unfair.

In response to these changes, TurboTax has implemented new pricing structures and is now offering more affordable options for taxpayers. However, many are still left wondering why the company is no longer part of the IRS Free File program.

The answer lies in the fact that TurboTax is a private company with its own business model and priorities. While it may have been beneficial to be part of the IRS Free File program, the company's decision to opt out reflects its commitment to providing services at market rates rather than relying on government subsidies.

In conclusion, the decision by TurboTax to leave the IRS Free File program is a result of disagreements over fees and revenue sharing. While it may have been inconvenient for taxpayers who relied on the program, TurboTax's new pricing structures offer more affordable options. As we move forward in the tax preparation industry, it's important to remember that private companies must make decisions based on their own business needs, even if they may not align with government programs.

Turbotax caster 2020