Lawmakers reintroduce bipartisan IRS bill with 'Free File' provision removed

Lawmakers reintroduce bipartisan IRS bill with 'Free File' provision removed
© Greg Nash

House lawmakers on Thursday introduced a revised version of their bipartisan IRS modernization bill — removing a provision from earlier versions that would codify the IRS's "Free File" program, which drew criticism in recent weeks.

Lawmakers hope that the House and Senate will quickly pass the updated measure.

“This bill is a ray of hope,” said Rep. John LewisJohn LewisDemocrats ramp up oversight efforts over 'opportunity zone' incentive The 13 House Democrats who back Kavanaugh's impeachment Detroit police chief calls Tlaib facial recognization idea 'racist' MORE (D-Ga.), the chairman of the House Ways and Means Committee's oversight panel. Lewis introduced the bill along with the subcommittee's ranking member, Rep. Mike KellyGeorge (Mike) Joseph KellyDemocrats ramp up oversight efforts over 'opportunity zone' incentive Genetic counselors save health care dollars when involved in the testing process America's workers and small business owners need the SECURE Act MORE (R-Pa.).

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“It is a significant win for the American people because it demonstrates that even in the most difficult times, we can come together as a nation, as a people and as a Congress to accomplish important things for the American people," Lewis added.

The bill, known as the Taxpayer First Act, includes provisions designed to improve the IRS in several areas, including taxpayer services, taxpayers rights during the enforcement process, identity theft protection and information technology. For example, it would exempt low-income people from the IRS's private debt collection program and would establish a single point of contact at the IRS for identity theft victims.

The package, supported by Republicans and Democrats in both chambers of Congress, came about after the House Ways and Means Committee's oversight panel held a series of hearings and roundtables about improving the IRS. The House previously passed a version of the bill in April, and also passed versions of the measure last year.

The versions that previously passed the House included a provision to codify the IRS's Free File program — a partnership with tax-preparation companies in which the companies offer free online tax-filing services to low- and middle-income taxpayers. 

But some Democrats raised concerns about the Free File provision when the House held the April vote on the package, referencing a ProPublica article highlighting lobbying from tax-prep companies. In the following weeks, ProPublica wrote additional articles reporting that tax preparation companies have taken steps to hide their options under the Free File program, which drew concerns from lawmakers in both parties and prompted the IRS to start a review of the program.

The new version of the bill, without the Free File provision, has more than two dozen co-sponsors — including freshman Democratic Reps. Katie HillKatherine (Katie) Lauren HillBrindisi, Lamb recommended for Armed Services, Transportation Committees Human Rights Campaign head: Katie Hill's sexuality was a factor in coverage of allegations Poll: 6 percent of voters say revenge porn is more damaging to men MORE (Calif.) and Alexandria Ocasio-CortezAlexandria Ocasio-CortezOcasio-Cortez calls for Stephen Miller to resign over leaked emails Ocasio-Cortez meets Sasha Velour following DC performance Sanders 'very concerned about what appears to be a coup' in Bolivia MORE (N.Y.), who expressed concerns about the provision codifying IRS's partnership with tax-prep companies. 

Senate Finance Committee ranking member Ron WydenRonald (Ron) Lee WydenOvernight Defense: Families sue over safety hazards at Army base | Lawmakers, NBA's Enes Kanter speak out ahead of Erdoğan visit | Washington braces for public impeachment hearings Federal court rules baseless searches of travelers' devices unconstitutional NBA's Enes Kanter speaks out against Erdoğan ahead of White House visit MORE (D-Ore.) said in a statement Thursday that, with the new version of the bill, "the House and Senate have come together on a path forward for the Taxpayer First Act." 

"There’s no federal agency Americans interact with more than the IRS, and it’s critical that it be modernized to better serve taxpayers," he said. "There’s bipartisan agreement that Congress should not codify the Free File program given its deficiencies and allegations of deceptive advertising and search engine manipulation by participating companies."

Sen. Elizabeth WarrenElizabeth Ann WarrenDemocrats worry they don't have right candidate to beat Trump Overnight Energy: BLM staff face choice of relocation or resignation as agency moves | Trump says he's 'very much into climate' | EPA rule would expand limits on scientific studies Krystal Ball credits Gabbard's upswing in 2020 race to 'feckless' Democratic establishment MORE (D-Mass.) and Rep. Brad ShermanBradley (Brad) James ShermanOvernight Defense: Protests at Trump's NYC Veterans Day speech | House Dems release Pentagon official's deposition transcript | Lawmakers ask Trump to rescind Erdogan invite Bipartisan House members call on Trump to rescind Erdoğan invitation Live coverage: Zuckerberg testifies before House on Facebook's Libra project MORE (D-Calif.) also praised the removal of the Free File provision and urged Congress to pass their bill to direct the IRS to create its own free, online tax filing service.

"For years, giant tax-preparation companies have deliberately rigged the IRS program that is supposed to provide free filing services to low- and moderate- income taxpayers and used it to pad their bottom lines instead," Warren said. "Taxpayers and advocates around the country fought back — and have won a victory to prevent that broken program from being written into law."