In a letter to IRS commissioner, Mark Everson, Grassley and Baucus cited a new report from the Treasury Inspector General for Tax Administration which documented the failures of the Free File program. At a hearing earlier this year, Grassley and Baucus explored problems with the program.

"It seems the tax preparation industry was holding all the cards in the renegotiation of this program," Grassley observed, continuing:

"The industry appears to be using the Free File program as an opportunity to bolster its revenue through the sale of ancillary products at taxpayer expense. I’m all for private enterprise, but not when it co-opts taxpayer service. The IRS is losing the game and doesn’t even seem to realize it. The IRS’ first priority is supposed to be the taxpayer. It shouldn’t be taking away from taxpayer service to subsidize the tax preparation industry."

Baucus added:

"The IRS needs to take a good, hard look at the Free File program to make sure that it is working effectively for honest Americans who are trying to pay their taxes. In the 21st century, there should be an easy, convenient and free way for taxpayers to file their returns directly to the IRS online. Improving the Free File program would make many taxpayers’ lives easier and help us close the tax gap."