Senators call for FTC, IRS terminate five tax preparation companies profiting from misleading low-income taxpayers

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A group of lawmakers recently encouraged the Federal Trade Commission (FTC) and the Internal Revenue Service (IRS) to remove five tax preparation companies from the Free File program for low-income taxpayers.

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Sen. Elizabeth Warren (D-MA) joined a group of colleagues in forwarding correspondence to FTC Chairman Joseph Simons and IRS Commissioner Charles Rettig regarding reports the companies participating in the Free File program deliberately hid their free products from internet searches and instead pushed eligible taxpayers to pay for tax preparation.

“The fact that nearly half of Free File members are employing this deceptive practice is presumably a partial explanation for why so few eligible taxpayers use Free File at all,” the lawmakers wrote to Simons. “These companies’ actions in hiding Free File from search engine results, and therefore from consumers, in order to artificially inflate profits and deprive low-income consumers of a cheaper product merit investigation as unfair and deceptive practices.”

The lawmakers are calling on the IRS to terminate agreements with the companies in question, officials said, ensuring refunds are issued to taxpayers who improperly paid for services as a result of these deliberate actions that reduced access to Free File products for consumers.

“In light of this abusive conduct on the part of companies that have broken their pledge to increase access to free, online tax filing, I urge you to take any available actions to remove them from the Free File program,” the lawmakers wrote to Rettig. “I also urge you to refund tax preparation fees to taxpayers who should have had access to Free File but were unable to find it.”

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