Complexity and Insufficient Oversight of the Free File Program Result in Low Taxpayer Participation

The Commissioner, Wage and Investment Division, should develop and implement a comprehensive outreach and advertising plan to inform eligible taxpayers about the Free File Program and how to participate. This includes informing taxpayers that they must access the Program through IRS.gov to obtain a guaranteed free return filing.

The Commissioner, Wage and Investment Division, should require FFI members to fully disclose all criteria on the IRS.gov Free File web page that taxpayers must meet to e-file their Federal tax return for free. This disclosure should also identify those specific return characteristics that will result in the taxpayer being charged.

The Commissioner, Wage and Investment Division, should take immediate action to address the IRSAC's recommendations to 1) establish goals and performance metrics for the Program, 2) develop standards for frequently logging on to members' Free File websites as taxpayers and preparing returns that meet the members' Free File criteria, and 3) test members' websites to simulate returning Free File taxpayers to determine if the websites direct taxpayers to the Free File web page.

The Commissioner, Wage and Investment Division, should establish a process to assess the accuracy of the Free File Indicator, including a review to verify that only those returns qualified for the Program have the Indicator.

The Commissioner, Wage and Investment Division, should update the Adherence Testing Review Guide to include the specific tests to be performed to assess FFI member compliance with MOU requirements. This should include documentation to be maintained supporting the performance of these tests and the results of these tests.