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IRS OIG Report – Additional Action Is Needed to Expand the Use and Improve the Administration of the Free File Program

Treasury Inspector for Tax Administration: Additional Action Is Needed to Expand the Use and Improve the Administration of the Free File Program, June 28, 2007: “The IRS can do more to evaluate and promote the use of the Free File Program. While it has taken steps to evaluate the experience of Program users, it has not collected data about taxpayers who attempted to use the Program but did not or could not complete and file their tax returns or eligible taxpayers who did not use the Program. Of the 93 million taxpayers eligible for the Program in Calendar Year 2006, only 4.2 percent (3.9 million) used it. The IRS can also improve its administration of the Program. The IRS’ oversight reviews of the Alliance members were not fully documented. Alliance members also incorrectly included the Free File Indicator on approximately 37,000 returns from taxpayers who actually paid to prepare and file their returns. The Program software also did not always accurately compute taxes due, and the Guide Me To A Company feature that helps taxpayers select a Program vendor was not always complete or accurate.”

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