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E-Filing Should Be Free

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Seriously now, why does it cost money to e-file my taxes?

If processing an e-filed return were to take more time, require more effort, and consume more resources of the great Internal Revenue Service, I would be more accepting of the charge to e-file – except it doesn’t. In fact, I would venture to guess that the government saves far more money than the cost of e-filing when I actually e-file and that they should incentivize e-filing by at least making it free.

The only cost I can think of it that an e-filed return is processed faster so they have to cut the refund checks faster, which means the government is earning less in interest… but that’s not a legitimate reason because it’s not the government’s money in the first place. I think it costs money to e-file because several years ago it was an unproven system and the government wanted to lower the number of early adopters by putting in this roadblock. Now, years later, with e-filing in full effect, they just kept the fee in place because it generated revenue and the government loves revenue. But let’s get with the times and nix this stupid e-filing fee, the government already has our Social Security payments as a means of generating revenue they never have to repay, let’s not nickel and dime us for e-filing.

Okay, rant over, thanks for listening. :)

In the comments, I’ve learned that it’s the various filing companies that take the fee, not the IRS. So, I take back everything I said about Social Security and how the government loves revenue, I’m sorry government… I didn’t really mean all those mean things I said.

{ 21 comments, please add your thoughts now! }

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21 Responses to “E-Filing Should Be Free”

  1. maria says:

    I completely agree – paying to e-file is ridiculous. I’d rather spend a couple of dollars on envelopes, stamps and printer paper than e-file, not to mention I DO NOT TRUST the IRS’s e-filing capabilities. I work in the software industry & EVERY PROGRAM no matter how ‘excellent’ has their share of bugs. As such, I will never e-file unless I’m forced to do so, and I don’t see that happening anytime soon.

  2. It’s true, it should be. I was listening to a report on this on NPR a few weeks back and basically it comes down to the financial software lobby (Intuit, HR Block, etc.) that doesn’t want to lose this huge revenue pie. It is cheaper and easier for the government to handle e-filing. Here’s the story:

    http://www.npr.org/templates/story/story.php?storyId=9112083

  3. alex says:

    I wholeheartedly agree, E-filing saves everyone involved time and money. Why should it be discouraged?

  4. Chris says:

    Amen! Maybe if the government didn’t waste $100 on toilet seats, we could lose the e-filing fee! ^_^

  5. dong says:

    e-filing is free if you do it through one the sites that partners with the IRS. I think the only reason it isn’t free is because the vendor charges you, i.e. Turbotax. They know they can get you because you get a quicker refund.

  6. M. says:

    Isn’t e-filing basically free? I use Turbotax to do my taxes, and free e-filing is always included with the program purchase.

    From irs.gov:
    Q. Is there a fee for this filing option?

    A. The IRS does not charge a fee for e-file. However, an electronic return transmitter offering this service to taxpayers may charge a fee for transmission. Check out the Free File Home or IRS e-file Partners web page to learn about free and low cost e-file opportunities.

    Apparently it’s not the IRS that’s nickel-and-diming you…

  7. jim says:

    Hmmm… excellent points, I didn’t realize it was the companies taking the fee.

    • CK says:

      Let us know how the audit goes. ;-)

    • kurt says:

      It’s all about distraction. If you are complaining about the couple bucks you have to pay to efile, you won’t notice the tens of thousands of dollars you pay them for other stuff.

  8. Savvy Steward says:

    I used Turbo Tax online and was charged for the e-filing. I think it was free last year. Or maybe they bundled the price together.

    Anyways, I agree that whether it’s the government or these software companies, they should make it free.

  9. Yeah, the fee is in place so that HR Block, Intuit and other companies like that can force you to use their services. There is no public way of e-filing. They want your money.

    It is why I didn’t e-file this year.

  10. MikeK. says:

    I had a strange epiphony this weekend. My 4 year old daughter was sitting with me as I was doing my taxes. She asked what “taxes” were. I told her that the government uses taxes to pay for things like roads, schools, fire trucks, etc. And then she says to me: “You mean its God?”

    Part of me was laughing, part of me was crying. Government = God in the eyes of a 4 year old. Omnipotent in their eyes. Another example of the great wisdom of our forefathers in trying to limit the power of government.

  11. Dave says:

    I couldn’t agree more.

  12. shadox says:

    I wonder if your retraction came fast enough to stop the IRS from revenge auditing you… :-)

  13. shadox says:

    They did not limit it enough.

  14. Maria says:

    You need to be careful with some of these companies. If I were to e-file (which I won’t until I’m forced to), I would probably use the trusted reputation of Intuit or H&R Block, even if they cost more. In today’s ID Theft / hacker society you need to be careful about these virtually unknown companies (as well as the known ones) & how they protect your data. This is the main reason I will not e-file. Almost every other day you hear about a new company who’s system was hacked, not to mention how often this happens to various government agencies (VA is up to what 2 or 3 data ‘compromises’ now). So, along with buggy software, you need to worry about the databases getting hacked into & all your precious IRS data stolen. No thanks – I’ll continue to file on paper.

  15. SteveK says:

    I believe that the IRS makes publicly available their Application Programming Interfaces, so one can technically write their own e-filing software. But if you decide to fire up your copy of Visual Studio to start coding, you might not finish it before Tuesday. :-)

  16. miller says:

    I didn’t use any tax program this year (I use the easy form!), but when I looked into e-filing, it would have cost me a few dollars. So, out of principle alone, I sent in the paper. =)

    But I wanted to add that since I didn’t use a computer program, I wasn’t *directly* going through an H&R or another big financial name. It looks like it would have gone through “Free File Alliance, LLC” which is some group of private sector software companies (maybe including H&R, etc.). Note, its *free* for people with AGI’s under $52k.

    http://www.irs.gov/efile/article/0,,id=118986,00.html

    I agree it isn’t the government getting the money, but rather this group the government contracted e-filiing off to. And that company needs to make money — hence the charge.

    But regardless, I agree with everything everyone has said. The government is saving money via e-filing (could you imagine the person’s job it is to re-copy everyone’s paper taxes into a database???), so it should be free. The IRS needs to get their pants on straight with this one. It just doesn’t add up.

  17. Ron says:

    Previously, e-file was included in my Turbo Tax purchase; saw today that it was $16.95. Researched on-line and saw if you pay more for the program, e-file is free but, obviously not free since you are paying more in the first place.

    So………… I printed that baby (tax return) out and licked a couple of 39 cent stamps, bam, filed! And now, I have some cash left over for dinner out and they’ll just have to wait a little longer to process my returns and cash my checks.

    Turbo Tax will soon be a thing of the past for me.

  18. Joe says:

    Does anyone actually “lick” their stamps anymore? If it tried to, I’d have a bunch of adhesive in my mouth :-)


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