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News Posted on October 13, 2017

Professor Ventry Comments for NPR’s Marketplace on Tax Preparation Business

Professor Dennis Ventry commented for a report on the National Public Radio program Marketplace on efforts by companies in the tax preparation business to prevent government from initiating free return-free filing, a system in which the government would supply taxpayers with pre-populated, electronic returns using information already being sent to the IRS from banks, employers, other third-parties, and taxpayers themselves. 

Decades ago, Congress directed the Internal Revenue Service to develop free, electronic tax filing for all Americans. Feeling threatened by government competition, the nascent tax-prep software industry lobbied Congress to prevent the IRS from developing this technology, ultimately succeeding in forcing the IRS to endorse an industry-led consortium of tax-prep companies to provide ostensibly free tax filing services to low- and middle-income Americas.

The so-called “Free File Alliance” started offering tax-prep services in 2003, but over the last 14 years it has managed to serve just 2 percent of the taxpaying population. Meanwhile, the tax-prep software companies continue to actively oppose any and all attempts by governmental agencies to make tax filing easier and less expensive. For just one example, Inuit and H&R Block each spent over $1 million last year backing a piece of legislation that would have permanently banned the federal government from providing free electronic tax filing for taxpayers.

“Industry wants to keep a stranglehold over that particular service,” Ventry said, “which the IRS could just as easily provide.”

Professor Ventry is an expert in tax policy and legal ethics. His research interests include tax expenditure analysis, family taxation, professional responsibility and standards of care, tax filing and administration, tax compliance, public finance, and tax and legal history. In addition, he is Vice Chairman of the IRS Advisory Council, and co-author on the casebook, Federal Income Taxation with Martin McMahon, Jr., Daniel L. Simmons, and Bradley T. Borden.