Online tax filing service, TaxBrain Online Tax Center has announced its withdrawal from the IRS Free File Alliance, citing a change in the agency’s policy that it says compromises taxpayers’ privacy.
Announcing the move last Thursday, Leroy Petz, president of TaxBrain’s parent company Petz Enterprises Inc, revealed that the Revenue "has imposed a new rule for the Free File program that requires participating companies to uniquely identify each Free File tax return so that the IRS may permanently flag taxpayer records for secondary analysis."
"TaxBrain feels strongly that taxpayers shouldn't have their records flagged and segregated simply because they choose to use the IRS Free File program," explained Mr Petz.
Reports indicate that the controversy has its origins in a request by the IRS that a special “indentifier” be placed on returns received through the Free File program.
However, Terry Lutes, director of electronic tax administration at the IRS protested that taxpayer privacy is “protected unequivocally”, according to a Wall Street Journal report. He added that the request was entirely consistent with IRS policy.
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