Schumer Announces: For the First Time, All New Yorkers Will Now be Able to File Their Taxes Online for Free Through the IRS Website, Eliminating Once and for All Annoying Fees that Have Been a 'Tax on Filing Taxes'

Press Release

SCHUMER ANNOUNCES: FOR THE FIRST TIME, ALL NEW YORKERS WILL NOW BE ABLE TO FILE THEIR TAXES ONLINE FOR FREE THROUGH THE IRS WEBSITE, ELIMINATING ONCE AND FOR ALL ANNOYING FEES THAT HAVE BEEN A 'TAX ON FILING TAXES'

IRS Website Will Now Allow Taxpayers To Fill Out Their Tax Returns And File Electronically For Free For The First Time, Lessening the Financial Burden on Struggling New Yorkers and Americans

New Yorkers Wasted $70 Million on E-File Fees Last Year Alone

Schumer Brokered Agreement wit IRS, H&R Block and Intuit To No Longer Charge Taxpayers Unfair E-File Fees

U.S. Senator Charles E. Schumer today announced that in 2009 and beyond all taxpayers will be able to file their taxes electronically at no extra charge, saving taxpayers billions of dollars in fees and processing costs. Online tax filing is the easiest, cheapest, and most efficient way for Americans to pay their taxes and for the government to process them, yet in the past taxpayers had been forced to pay an additional fee to file their taxes electronically due to exclusive agreements between the IRS and tax preparation software companies. Two of these companies, H&R Block and Intuit, have agreed to provide free e-filing to all taxpayers using their software. Schumer has been pushing for years to make e-filling free and available for all taxpayers and applauds the tax-preparation software providers and the IRS for the work they have put into developing this online utility.

"This is a great victory for taxpayers in New York and across the country," said Schumer. "While New Yorkers are struggling to make ends meet, the last thing they need is a tax on paying taxes and I am proud to have helped bring this unfair practice to an end."

In letters to and meetings with Senator Schumer, both H&R Block and Intuit, the leading tax-preparation software providers, agreed to eliminate fees on electronic filing to all taxpayers using their software in 2009. The IRS is also on board with free electronic tax filing. The IRS previously offered free e-filing to only those taxpayers whose income was under $52,000 through the free alliance. MOST other taxpayers had to pay to e-file by going through a third party tax preparer or purchasing tax-prep software. Schumer called on the IRS to expand their e-file system so that all taxpayers have access to free online tax filing without incurring the extra cost of software or hiring a third party in order to file their taxes electronically. Now, for the first time, there are fillable forms on the IRS website and any taxpayer can fill out their taxes there, save their work on a secure server, and e-file for free.

Schumer added, "I am very proud that this great accomplishment has come to fruition, especially during these tough economic times. Not only will taxpayers save more than $1 billion in annual e-filing fees, but error rates will also fall, and processing costs for the government will decline - leaving more resources to improve tax compliance efforts and reduce the tax gap."

Late last year, the IRS came to an agreement with the Free File Alliance, a group of tax-software companies, to expand e-filing via the IRS.gov website. The IRS also developed a web portal with fillable forms that can be submitted online so that taxpayers will no longer have to buy software or use a paid tax preparer if they wish to file electronically. Now taxpayers that wish to fill out their own returns will be able to complete and submit their returns online for the first time in 2009.

In their letter to Senator Schumer, Intuit stated, "There is no reason why a free electronic forms utility cannot be available through IRS Free File for the coming 2009 tax season." In response, Senator Schumer urged IRS Commissioner Shulman to do whatever is necessary to implement the new system in time for next tax season. Earlier this year, Schumer received confirmation that the system will be up and running for the 2009 tax season (tax year 2008).

Electronic filing is clearly the easiest, cheapest, and most efficient way for Americans to pay their taxes and it is also the cheapest and most efficient way for the IRS to process taxes. Processing paper returns costs the IRS $2.50, while an e-filed return costs only 30 cents to process. The IRS finds roughly one error in every one hundred returns filed electronically, regardless of whether the return was prepared professionally or self-prepared by the taxpayer. Yet the IRS finds approximately one error in every five paper returns, incurring massive additional processing costs.

Through these various agreements, starting in 2009 only certain storefront tax preparation shops will still charge a fee to e-file. E-Filing will be free for those using the IRS website, buying tax preparation software, or utilizing the Free File alliance. Schumer will still push for a ban on all e-filing fees in the 111th Congress, but the agreement reached is a major step in the right direction. "Having free fillable forms available on the IRS website is a huge gain for taxpayers," said Schumer. "And I am glad that the software companies finally dropped their objections, as I have been urging them to do for years."

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