IRS enhances Free File service for 2006 filing season

The IRS has made its Free File service available for the 2006 tax season with enhanced services and expectations to serve more eligible tax filers.

More than 70 percent of the nation’s taxpayers—more than 92 million people with an adjusted gross income of $50,000 or less—qualify this year for Free File. Tax filers access Free File services through the IRS.gov Web site.

“This unique private-public partnership provides free tax software and free electronic filing. It’s targeted to middle- and low-income taxpayers who can most benefit from this program,” said IRS commissioner Mark Everson in a statement yesterday.

More than 5.1 million taxpayers used Free File last year, almost a 47 percent increase over the 3.5 million users in 2004.

A consortium of 22 tax preparation software companies, the Free File Alliance, provides the free tax preparation and electronic filing service. Each company sets its own criteria. Companies include tax preparer giant H&R Block Inc. of Kansas City, Mo.; Intuit Inc. of Mountain View, Calif., maker of TurboTax; and C&S Technologies Inc. of Milpitas, Calif., makers of eSmarttax.

Alliance members will provide additional tax forms this year, such as for automatic extensions of time to file, and display on their Web sites whether they perform state online tax preparation and filing services and the associated fees, if any, said Free File Alliance director Tim Hugo.

Alliance companies have agreed to best practices, including consumer-oriented requirements, such as providing detailed information to assist the customer in making good choices about their return.

In related news, electronic filing of 13 forms will be unavailable until the end of this month because of tax law changes that Congress approved late last year, IRS said. The delay does not affect the most heavily used forms. However, the form for education credits is one of those requiring programming revisions.

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