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 LewisThe Hill's Morning Report — Biden steadies in third debate as top tier remains the same CBC marks 400th anniversary of slaves' arrival in US GOP buys JonOssoff.com after Democrat launches Georgia Senate bid 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 KellyHouse votes to repeal ObamaCare's 'Cadillac tax' GOP lawmaker: 'I'm a person of color. I'm white.' Trump signs bipartisan IRS reform bill 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 HillYoung insurgents aren't rushing to Kennedy's side in Markey fight Polling director: Young voters swayed by health care, economy, gun control Lawmakers grill manufacturers over 'forever chemicals' contamination MORE (Calif.) and Alexandria Ocasio-CortezAlexandria Ocasio-CortezGreta Thunberg scolds Congress on climate action: 'I know you are trying but just not hard enough' Ocasio-Cortez endorses challenger to Democrat Lipinski in Illinois race The Hill's Morning Report - What is Trump's next move on Iran? 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 WydenDemocrats press for action on election security Interior gains new watchdog On The Money: NY prosecutors subpoena eight years of Trump tax returns | Senators struggle to get spending bills off ground as shutdown looms | Progressive tax-the-rich push gains momentum | Trump faces dwindling leverage with China 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 WarrenKavanaugh impeachment push hits Capitol buzz saw Mark Mellman: The most important moment in history? Katie Pavlich: The Democrats' desperate do-overs MORE (D-Mass.) and Rep. Brad ShermanBradley (Brad) James ShermanHouse Democrats blur lines on support for impeachment Hillicon Valley: Trump seeks review of Pentagon cloud-computing contract | FTC weighs updating kids' internet privacy rules | Schumer calls for FaceApp probe | Report says states need more money to secure elections Here are the 95 Democrats who voted to support impeachment 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."