April 15 – you just wish it would be over! So try Free File. Check out the free services to see if you’re eligible. Then get your taxes behind you and your refund in half the time as paper filing. It’s fast, it’s free, it’s done!

Whoever said there is no such thing as a free lunch may have been right. But for millions of eligible taxpayers this year, there is Free File. Free File is online tax preparation and electronic filing through a partnership agreement between the IRS and the Free File Alliance, LLC. In other words, you can e-file... free.

Frequently Asked Questions (FAQs)

Why was the Free File Alliance formed?
In November of 2001, OMB's Quicksilver Task Force established 24 e-government initiatives that are part of the President's Management Agenda. These initiatives were designed to improve Government to Government, Government to Business, and Government to Citizen electronic capabilities.

One initiative, EZ Tax Filing, instructed the IRS to provide free online tax return preparation and filing services to taxpayers. In accordance with this OMB directive, the IRS began working in partnership with the tax software industry to develop a solution. The result was the formation of the Free File Alliance, LLC, a group of tax software companies, managed by the Council for the Electronic Revenue Communication Advancement (CERCA), who will provide free online tax preparation and electronic filing services.

What services does the Free File Alliance offer?
Through a public-private partnership between the IRS and the tax software industry (i.e., Free File Alliance, LLC), taxpayers will be able to access free, online tax preparation and electronic filing services through irs.gov. Eligible taxpayers will be able to prepare and file their federal income tax returns using online software provided by the Free File Alliance members - not the IRS.

What benefits will these services provide taxpayers?
The benefits of using these free services are identical to those of e-filing, which include:

• Reduced tax return preparation time;
• Faster refunds;
• Accuracy of return;
• Acknowledgement of return receipt;
• Eligible taxpayers have several free services to choose from;
• Use of free tax preparation software is comparable to the Alliance member's paid product.

Who is eligible for Free File?
The partnership agreement called for the Free File Alliance as a whole to provide free tax preparation and filing to at least 60 percent of the American taxpayers, or approximately 78 million people. Each participating software company has set its own eligibility requirements. Generally, those requirements will be based on: Age; Adjusted Gross Income (AGI); Eligibility to file Form 1040EZ; Eligibility to claim the Earned Income Credit; State residency; and Active duty military status (if applicable).

What information do taxpayers need to determine eligibility for a Free File service?
Eligibility for a particular free file service will be dependent on the requirements set forth by each Alliance member. In general, these requirements may be one or any combination of the following: Age; Tax Year 2002 Adjusted Gross Income (AGI); Eligibility to file Form 1040EZ; Eligibility to claim the Earned Income Credit; State residency; and Active duty military status (if applicable). If you are married filing jointly, only one taxpayer needs to meet the eligibility requirement unless noted.

When will Free File be available?
These free services, accessible through irs.gov, will be available to eligible taxpayers January 16, 2003 through April 15, 2003. Some companies will also offer free services through October 15, 2003 to accommodate taxpayers who may need an extension.

How does an interested taxpayer get started?
Determine eligibility: Upon arrival to the Free File page within irs.gov, the taxpayer must determine their eligibility for using a particular company's free service. This eligibility can be determined by two methods. First, they may browse the complete listing of Alliance members and their free services. Second, a taxpayer can use a "questionnaire" application (i.e, Free File Wizard) designed to assist the taxpayer in identifying those free services for which they may qualify. Each Alliance member will identify their company name and will have a simple description of the criteria for using their free service. Each Alliance member's company or product name will be linked to additional information about the company and/or services.

Link to free services: Upon determining eligibility, the taxpayer can link directly to that Alliance member's free service by clicking on the Alliance member's "Start Now" link. Upon doing so, taxpayers will be notified they are leaving the irs.gov web site and are entering the Alliance member's web site.

Prepare and File Income Tax Return: The company's software will prepare and e-file your income tax returns using proprietary processes and systems. Electronically filed returns will be transmitted by the company to the IRS using the established e-file system, which uses secure telephone lines. An acknowledgment file, notifying you that the return has been either accepted or rejected will be sent via email from the company.

Is this Internet filing?
Yes. The free services will be provided via the Internet; taxpayers will enter data with calculations performed online. Completed tax returns will be sent electronically from the Alliance member to the IRS through the existing e-file system using secure telephone lines. An acknowledgment file, notifying the taxpayer that the return has been either accepted or rejected will be sent via e-mail from the Alliance member.

How will Taxpayers' security and privacy be protected?

• Tax return preparation will be accomplished using proprietary software approved by the IRS; transmittal will be through the established IRS e-file system.
• Each Alliance member must attain a third party privacy and security certification.
• Alliance members must comply with all federal rules and regulations on taxpayer privacy for paying and free customers. These rules prohibit use of tax return data for purposes not specifically authorized by the taxpayer.

Can Free File Alliance members share taxpayer data with anyone besides the IRS?
No. As part of the agreement, the Alliance members must adhere to the strict privacy standards of the IRS.

What information will the IRS collect or retain from taxpayers as a result of using Free File?
The information you provide through the Free File Wizard will be used to help you select a free service only; thereafter it will be deleted. The only information retained by the IRS is the return information submitted when officially filed with the IRS.

What oversight of the program will the IRS provide?
The IRS will monitor the progress of each of the Alliance members. If any problems should develop, the members are required to alert the IRS. If appropriate, the IRS will remove the company from the on-line listing until the problem is resolved.

What type of Customer Service Support will be provided to taxpayers?
As part of the Agreement, Alliance members are to provide appropriate customer service to their clients. Taxpayers who have service questions or are experiencing problems with the services being offered by a particular Alliance member's software should contact the customer service function of that particular company. In the event taxpayers contact the IRS first, the IRS customer service representatives will have contact information for each Alliance member and if necessary, will refer accordingly.

How are low-income taxpayers without home computers supposed to use free internet filing?
The IRS hopes to work with existing coalitions, churches and community associations to expand computer access to taxpayers without home computers. Also, Free File is only one option for low-income taxpayers. The IRS also supports many volunteers during the filing season through Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE). In addition, the Taxpayer Assistance Centers at most local IRS offices can aid low-income taxpayers.

Does this process encourage taxpayers to use Refund Anticipation Loans?
No. Taxpayers are under no obligation to use Refund Anticipation Loans or purchase any product from the software company (Some participating companies do not offer such services). Obtaining a fee-based product is a decision left to the individual taxpayer. The IRS reminds taxpayers that using e-file with direct deposit can lead to receiving a refund in 10 days or less.

Why is the government doing this through a partnership with private industry rather than providing its own software free to the public?
The government believes that private industry, given its established expertise and experience in the field of electronic tax preparation, has a proven track record in providing the best technology and services available. In addition, Treasury has indicated that it does not want the IRS to enter into the tax software business. The Government believes that a partnership with private industry will: provide taxpayers with higher quality services by using the existing expertise of the private sector; maximize consumer choice; promote competition within the marketplace; and meet objectives in the least costly manner to taxpayers.

Some private sector firms have offered free e-filing to select taxpayer groups for several years; how is this approach different?

• This approach offers a multi-year agreement between the IRS and the Free File Alliance to provide these free service(s) to more taxpayers. Previously, free offerings were not consistently available and were subject to modification or discontinuation from year to year.
• Taxpayers will have easier access to the Free File web page (hosted on irs.gov), which will provide a listing of all free offerings in a single location.
• Alliance members will offer both free preparation and e-filing services. There will be no cost to the taxpayer. Previously, some companies charged for preparation (filling of forms and tax calculations) while offering the transmission free, or provided the preparation free while charging for transmission, or some variation thereof. Under the Agreement, both are free to eligible taxpayers.

Privacy and security concerns
Your tax information and data will be protected. To ensure your data's safety, we have required each participating company to obtain both a privacy and security seal certification. These certifications programs, administered by third party providers, certify that your tax return information will be protected from unauthorized access during the tax preparation process. For more information, we encourage you to visit the company's privacy and security policy located on their commercial web site.

Credit:
Your Link to Free Online Filing
Whoever said there is no such thing as a free lunch may have been right. But for millions of eligible taxpayers this year, there is Free File. Free File is online tax preparation and electronic filing through a partnership agreement between the IRS and the Free File Alliance, LLC.
http://www.irs.gov/app/freeFile/welcome.jsp
http://www.irs.gov/app/freeFile/html/moreInfo/more_info_important_information.html

Related Information:

NBA Benefit Provider - IRS Division of Small Business and Self Employed Community

NBA Resource Article - IRS Answers Frequently Asked Questions About Information Returns

NBA Resource Article - E-file, IRS.gov Help Avoid Problems at Tax Time