Taxpayer Advocate Service News
  1. NTA Blog: FREE FILE: The Free File Program Is Failing to Achieve Its Objectives and Should be Substantially Improved or Eliminated

    Subscribe to the NTA’s Blog and receive updates on the latest blog posts from National Taxpayer Advocate Nina E. Olson. Additional blogs from the National Taxpayer Advocate can be found at

    In this week’s blog, I highlight my concerns with the IRS Free File program, which I also discussed in my 2018 Annual Report to Congress and my recent testimony before the House Ways and Means Subcommittee on Oversight. I also describe my personal experience using Free Fillable Forms and make some recommendations for improving these products. This is a bit of a long post, but the topic requires some background discussion to understand how we got to where we are today.


    The IRS Restructuring and Reform Act of 1998 directed the IRS to set a goal of increasing the e-file rate to at least 80 percent by 2007. In 2002, the IRS entered into an agreement with a consortium of tax software companies, known as Free File, Inc. (FFI), under which the companies would provide free tax return software to a certain percentage of U.S. taxpayers, and in exchange, the IRS would not compete with these companies by providing its own software to taxpayers. The agreement has been renewed at regular intervals, and for at least the past decade, the agreement has provided that the consortium would make free tax return software available for 70 percent of taxpayers (currently, about 105 million), particularly focusing on increasing access for economically disadvantaged and underserved communities, as measured by adjusted gross income.

    The program provides two return preparation options for taxpayers that can be accessed on the homepage:

    • Free File Software: options for online software to guide taxpayers through return preparation available to taxpayers with incomes less than $66,000; and
    • Free File Fillable Forms: an electronic version of IRS paper forms available to all taxpayers, regardless of income.

    The Services Provided by Free File, Inc. Fail to Meet the Needs of Taxpayers, and Use of the Program Continues to Decline

    While e-filing has increased by over 180 percent since 2002, use of the Free File program has not. In 2018, individual taxpayers filed more than 154 million tax returns. Yet fewer than 2.5 million of those returns, or 1.6 percent, were filed using Free File software (this calculation does not include the number of taxpayers who used Free Fillable Forms to file their tax returns). Thus, about 68 percent of all taxpayers were eligible to use Free File software but did not do so—frequently paying to purchase the same or comparable software instead. In fact, use of the Free File program has decreased since 2014—meaning that taxpayers who used Free File in previous years chose a different option to file their returns in the following year.

    Free File Returns by Fiscal Year (in Millions)

    In comparison, paid preparers filed almost 78.6 million tax returns electronically in tax year 2017. Over 3.5 million returns were prepared through Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs, a higher number than prepared by FFI despite the fact that taxpayers must expend more time and resources to go to one of these sites.

    Individual Return Filings by Filing Type, FY 2017

    In addition, data on repeat usage suggest Free File users are widely dissatisfied with the program. Among taxpayers who used Free File software in 2017, the majority (51 percent) did not use Free File software again in 2018.

    Why do so few taxpayers use Free File, instead often opting to pay for the same or comparable software?  Are taxpayers unaware of these services or unwilling to use them?  In my 2018 Annual Report to Congress, I identified the Free File program as one of the Most Serious Problems faced by taxpayers. I am concerned that the IRS devotes minimal resources to overseeing and testing this program, to understanding why so few eligible taxpayers are using it, and to considering how the service offerings could be improved.

    I identified the following specific shortcomings:

    • The lack of a marketing budget for the Free File program. The IRS does not promote or advertise Free File, outside of placing it on its website.

    • The absence of an effective evaluation process to understand the experience of taxpayers who use the program and whether the terms of the IRS Free File Memorandum of Understanding (MOU) are being met.

    • Age restrictions that sharply curtail the number of Free File options available to older taxpayers. Only three of the current 12 Free File providers offer services to taxpayers of all ages, and five have age limitations that start before the age of 60.

    • The absence of any Free File options for English as a Second Language (ESL) taxpayers during filing season 2018. A recent TAS study showed that because of language barriers and less education, Spanish-speaking taxpayers may be especially vulnerable to unscrupulous return preparers who promote high-interest loans and charge high fees—which makes the need for tax return preparation assistance, vetted by the IRS, even greater for members of this group.

    My own personal experience with Free File is instructive. As most readers know, for almost two decades, I have advocated that the IRS create an electronic analogue to the paper Form 1040, instructions and publications so taxpayers can electronically prepare and file their tax returns for free. I’ve recommended the product do basic math and transfer numbers from one form to another (thus avoiding computation and clerical errors), and link to specific line instructions and publications, including fillable worksheets. The Free Fillable Forms product on Free File satisfies most of those requirements, and I have used that product to prepare my own tax return since its inception.

    Free Fillable Forms is not without its flaws. Each year I discover glitches, which I convey to the IRS, and the 2018 filing season was no exception. As I entered my information into the main Form 1040, I discovered that the links to the instructions did not function properly. Thus, I had to log back and forth between the website to read the 1040 instructions and look up my tax rate, and the Free Fillable Forms site to enter the information into the electronic 1040. When I hit the “Save” button at the top of the screen, I was not provided the option of saving the return to my personal computer. When I attempted to print out my tax return, I was not able to print out the entire return. Instead, I could print out the individual schedules one-by-one, but I could not print out the 1040.

    I thought about just going to the IRS website and printing out a blank 1040 and transcribing the numbers from the Free Fillable form 1040, so I could have a complete copy of my return. But that might look suspect—to have a handwritten 1040 with printed schedules—if I were to submit my return for a loan application or some other purpose. So, I went back to, printed off a Form 1040 on paper, filled in the lines on the paper Form 1040 with the information from Free Fillable Forms, then went back to and transcribed the numbers from the paper 1040 onto the “fillable-pdf” Form 1040, and, finally, printed off the “fillable-pdf” Form 1040 and put it together with the other schedules I had printed from Free Fillable Forms.

    Oof. Is it any wonder usage is so low?  Not everyone is going to be as stubborn as the National Taxpayer Advocate; most would have abandoned the product when they learned they couldn’t link to instructions.

    Testing by TAS found that several software providers on Free File have limitations in their navigational features and ability to help taxpayers correctly complete their returns, resulting in poor service quality. In addition, cross-marketing and advertising of other services on Free File software platforms can confuse and frustrate taxpayers, probably contributing to the low repeat-usage rate. Because Free File software programs are accessed through, taxpayers may be under the false impression that the IRS endorses the Free File products available there, and thus a poor experience with Free File may reflect poorly on the IRS and can erode taxpayers’ trust in fair tax administration.

    Can the Program Be Improved?

    Preliminary data for the 2019 filing season show that, as of March 8, 2019, Free File usage slightly increased by five percent, compared to the same time period in 2018.   The increase may be attributed to the following new features:

    • If a taxpayer using Free File visits a member’s website and finds he or she doesn’t qualify to use that member’s Free File product, the taxpayer will be able to more easily return to the main IRS Free File page and select another product.
    • If a taxpayer who used Free File last year visits the Free File member’s website this year, the first option the taxpayer will see after logging into his or her account will be the Free File option (as opposed to a paid product).
    • Taxpayers who used Free File last year will receive emails welcoming them back to the Free File service.

    It should be emphasized that a five percent increase in the use of Free File software, while positive, amounts to only about 124,000 additional Free File returns. Put differently, it would have caused the percentage of taxpayers using Free File software last year to increase from 1.6 percent of all filed returns to 1.7 percent of all filed returns.

    To achieve a discernible increase in Free File participation, I recommend the IRS take the following steps:

    • Develop actionable goals for the Free File program before entering into a new agreement that, among other things, aim to substantially increase taxpayer usage and increase the percentage of taxpayers who continue to use the program from year to year.

    • Create measures evaluating taxpayer satisfaction with the Free File program and test each return preparation software’s ability to complete various forms, schedules, and deductions.

    • Provide Free File Fillable Forms and software options for ESL taxpayers.

    • Prepare an advertising and outreach plan to make taxpayers, particularly in underserved communities, aware of the Free File program.

      However, if the IRS continues to show no appetite for monitoring and overseeing, including testing, its Free File offerings, I recommend it terminate that aspect of the program and instead focus on improving and promoting Free Fillable Forms. At any rate, the IRS should improve Free Fillable Forms by:

      • Linking from a specific line on the 1040 to the instructions for that line (rather than to the beginning of the instruction, making the user page through scores of pages);

      • Linking from IRS form instructions to IRS publications wherever IRS forms reference IRS publications;

      • Creating versions available in other languages, including Spanish;

      • Ensuring the program is compatible with major printers;

      • Enabling users to save a copy of their return to their personal electronic devices; and

      • Providing a dedicated email address where taxpayers (such as the National Taxpayer Advocate) can get help when experiencing technology glitches.

      The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate is appointed by the Secretary of the Treasury and reports to the Commissioner of Internal Revenue. However, the National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.

    • TAS office intake numbers are being used in scam calls to taxpayers

      Certain TAS telephone numbers are being used in a spoofing scam. Taxpayers are targeted by either robocalls or live solicitors claiming to be with TAS or the IRS. The caller ID displays a TAS number, but it is a scam.

      If you receive such a call, report it immediately to

      For more information, see the Report Phishing and Online Scams page on

    • TAS Tax Tip: Claiming the EITC or CTC Credit this year? Here are some tips…

      Are you planning on claiming the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC) on your federal tax return this year? If yes, then you should know some things have changed since last year.

      Child Tax Credit

      The first thing you need to be aware of is that the Tax Cuts and Jobs Act changed the requirement for claiming the CTC. Eligible children must have a Social Security Number (SSN) that is valid for employment. If you have a newborn or other child for whom you do not have a SSN yet, you may want to visit your local Social Security office or apply online soon and get one before you have to file.

      Earned Income Tax Credit

      Under the EITC, eligible families with three or more qualifying children could get a maximum credit of up to $6,431. EITC for people without children could mean up to $519 added to their tax refund.

      All workers who earned around $54,000 or less should learn about EITC eligibility and use the EITC Assistant to find out if they qualify before filing. The Assistant will help determine your filing status, if you have a qualifying child or children, if you qualify to receive the EITC, and estimate the amount of the credit you could get. If you don’t qualify, the Assistant explains why.

      Also, before you file, you should check out the How Do I Claim EITC? Information there will tell you:

      • the documents you need
      • the common errors to avoid
      • the consequences of filing an EITC claim with an error on the return
      • what you need to do if your EITC was denied in a previous year
      • how to claim the credit for earlier tax years

      Another great resource is our Get Help page for Claiming the Earned Income Tax Credit.

      Other Credits

      In addition to the EITC, if you have children or other dependents, you may be eligible to claim the Child Tax Credit ($2,000 per qualifying child), the Additional Child Tax Credit ($1,400 per qualifying child), or the new Credit for Other Dependents ($500 per qualifying person). Don’t miss out on any of these credits! All are refundable and can put money in your pocket.

      Other Changes Under the Tax Cuts and Jobs Act

      For individuals, TAS’s Tax Reform Changes website, in both English and Spanish, has information for you about what is changing and what is not in this tax year in an easy to understand format by topic and line-by-line on last year’s (2017) Form 1040. It also tells you where to report those items on the new 2018 Form 1040 and schedules.

      Need Help Filing?

      See our TAS Tax Tip: Tax Filing Help Information page.

      When Will I Get My Refund?

      Many different factors can affect the timing of your refund after the IRS receives your return. Even though the IRS issues most refunds in less than 21 days, it’s possible your refund may take longer. Also, remember to take into consideration the time it takes for your financial institution to post the refund to your account or for you to receive it by mail. Whether you file electronically or on paper, direct deposit gives you access to your refund faster than a paper check. You can use Where's My Refund? ‎on and the IRS2Go mobile App to check on the status of your refund.

      Still Don’t Have Your Refund Yet?

      If you were expecting a tax refund and it hasn’t arrived, there are many reasons why it could be delayed or it hasn't been delivered. So, if you still don’t have your refund and it has been 21 days or more since you e-filed (or six weeks or more since you mailed your return), visit our I don't have my refund page for ideas on what to do next.

      Other Resources:

      Request an expedited refund by calling the IRS at 1-800-829-1040 (TTY/TDD 1-800-829-4059).

    • NTA Blog: The IRS Office of Chief Counsel is Using Email to Avoid Disclosure of Program Manager Technical Advice

      Subscribe to the NTA’s Blog and receive updates on the latest blog posts from National Taxpayer Advocate Nina E. Olson. Additional blogs from the National Taxpayer Advocate can be found at

      This blog highlights problems with the transparency of the IRS Office of Chief Counsel (OCC), which I discussed in the 2018 Annual Report to Congress (ARC). I also discussed transparency in the 2006 (p.10), 2007 (p.124), 2010, and 2011 (p. 380) Annual Reports, and in the Fiscal Year Objectives Reports in 2008 (p. xxi) and 2018.  

      A big part of the OCC’s most recent transparency problem is that it allows its attorneys to avoid disclosure of advice to IRS program managers (called Program Manager Technical Advice or PMTA), by issuing the advice as an email, rather than a memo. Although I do not know when the OCC created this loophole, the number of PMTA disclosures has been falling in recent years (as shown below). Compounding the problem is that the OCC has not issued any written guidance describing what must be disclosed as PMTA and most of OCC’s attorneys have not received training on that topic in the last few years. In addition, the OCC has no systems to monitor whether all PMTAs are timely identified, processed as PMTAs, and disclosed.

      I discussed these problems in the Annual Report because the OCC’s transparency is important to taxpayers. Through various laws, such as Freedom of Information Act (FOIA) (5 U.S.C. § 552), IRC § 6110, and the Taxpayer Bill of Rights (TBOR), Congress has granted taxpayers the right to be informed. It is the first right listed in the TBOR for good reason. If taxpayers do not know the rules and why the IRS has adopted them, they cannot determine if they should exercise their other rights (e.g., the right to challenge the IRS’s position and be heard or the right to appeal an IRS decision in an independent forum). Information about how the OCC interprets the law also helps taxpayers avoid taking positions that would incur penalties or ensnare them in audits or litigation.  

      Nonetheless, rather than voluntarily disclosing its PMTAs under the FOIA, the OCC has argued in court that they are privileged, even though, as many have observed (e.g., here, here, here, and here), the policy justification for privileges do not apply with the same strength to communications with government attorneys as they do to communications with those in the private sector. Pursuant to a settlement reached with Tax Analysts in July 2007, however, the IRS agreed to disclose PMTAs dated or prepared from 1995 forward “on the basis of the standards announced by” the U.S. Court of Appeals for the District of Columbia Circuit in its June 14, 2002, opinion in Tax Analysts v. IRS, “as applied by the district court” in its February 7, 2007, opinion in Tax Analysts v. IRS.

      Missing and Delayed Disclosures Raise Concerns

      I first became concerned about the OCC’s implementation of the settlement when it did not timely disclose important advice that it issued in 2018. For example, the OCC was providing legal “calls” to the IRS concerning the Tax Cuts and Jobs Act (TCJA), which was enacted on December 22, 2017. The IRS was using the OCC’s calls to draft forms, FAQs and other guidance, but the advice was not being disclosed to the public, even though the public would have been interested in the legal reasoning behind those calls.  The calls still have not been disclosed.  

      As another example, the OCC advised the Wage & Investment Division (W&I) that it could use math error authority (MEA) to disallow tax credits long after the IRS had processed the returns (i.e., post-processing) and issued refunds, as discussed in another blog and the 2018 ARC. Although the OCC had issued PMTA 2018-17 on April 10, 2018, it did not post the advice until September 7—about five months later and only after inquiries by my staff—long after W&I had begun using its new post-processing MEA to adjust returns.

      As another example, sometime before mid-April 2018, the OCC had given the Large Business and International Division (LB&I) advice about the newly-enacted “transition tax” under IRC § 965. LB&I relied on the advice to issue FAQs and to deny refund requests, as discussed in another blog. Although IRC 965(h) says that taxpayers can pay the tax over an eight-year period without interest, the OCC advised that LB&I had no legal authority to return excess payments to taxpayers (i.e., payments of more than the amount required for the first installment but less than the entire transition, even though the entire tax did not have to be paid for eight years). Although LB&I was relying on the OCC’s advice to retain excess payments, the advice had not been disclosed. After inquiries from TAS, the advice was belatedly rewritten and disclosed as PMTA 2018-16 (Aug. 2, 2018).

      The OCC told us that PMTA 2018-16 and -17 were only released because there was an “agreement” with W&I and a “request” by LB&I, respectively, to disclose them. It is unclear why the OCC thought it needed IRS permission to release them as opposed to being required to disclose them under the settlement and the FOIA.

      Moreover, the OCC’s delay in disclosing its advice probably harmed taxpayers. Had OCC’s legal analysis been released to the public sooner, stakeholders would have understood the OCC’s interpretation of the law and started efforts to protect taxpayers sooner. Some taxpayers could have avoided making payments they could not recover if the PMTA had been disclosed when it was first issued to LB&I (i.e., before LB&I’s FAQs). These examples prompted TAS to look further into how the IRS was implementing the settlement with Tax Analysts.

      The OCC Has Been Disclosing Fewer PMTAs

      Following the Tax Analysts litigation, the OCC posted a significant number of PMTAs on; however, it has generally been posting fewer in recent years, as shown below.

      PMTAs Posted on
      by Calendar Year

      PMTAs Posted on

      [Source: TAS analysis of PMTAs posted on as of February 19, 2019.  Where a PMTA did not have an issue date, TAS estimated the year based on when the case was closed and the date of memos posted before and after.]

      As of February 19, 2019, the OCC had released only 12 PMTAs that were issued in 2018.  While some of the decline in PMTAs could be due to the decline in the IRS’s budget, one would expect the OCC to provide significantly more advice to program managers as a result of the TCJA. It issued 68 PMTAs following tax legislation enacted in 1998—more than double the number it issued in 1997, whereas the number actually declined following the TCJA. Moreover, only one of the 12 PMTAs issued in 2018 concerns the TCJA (i.e., PMTA 2018-16, as discussed above).  

      In the OCC’s formal response to a TAS inquiry, it said that “[t]he function of the legal advice provided by the Office of Chief Counsel is not to inform taxpayers or practitioners about how it interprets the law… [and] The issue of whether the Office of Chief Counsel is releasing advice in compliance with court decisions interpreting the FOIA and the process for performing that function is not a problem that taxpayers have with the Internal Revenue Service…” Given this view, it is perhaps unsurprising that it we found problems with the OCC’s disclosure procedures.  The rest of this blog summarizes those problems.  

      The OCC Has Not Provided Its Attorneys With Written Guidance Describing What Must Be Disclosed as PMTA

      The OCC has provided oral training to about 207 attorneys since 2015—less than 40 percent of those employed in Washington, D.C.—about what must be disclosed as PMTA. Thus, most attorneys have not received training recently and some may not have received training at all. Moreover, because the attorneys were not given written training materials and the Chief Counsel Directives Manual (CCDM) contains no specific guidance about what advice must be disclosed as PMTA, there is no way to verify whether the training was accurate or consistent.  In theory, the decline in PMTAs could be due to inaccurate or inconsistent training and a lack of written guidance. However, the procedures themselves (discussed below), are more likely to be the problem.

      The OCC Does Not Disclose Email as PMTAs

      In its formal response to TAS, the OCC described what must be disclosed as “advice [that] is in memorandum form and otherwise meets the standards announced by the circuit court in Tax Analysts v. IRS, 294 F.3d 71 (D.C. Cir. 2002), and as applied by the district court in Tax Analysts v. IRS, 483 F.Supp.2d 8 (D.D.C. 2007).” [Emphasis added.] The OCC was quick to point out that it “does not encourage its attorneys to provide legal advice in a manner that circumvents” the rules.  If the OCC’s written response is consistent with its formal response to TAS, however, then it is leaving its attorneys in the dark about what must be disclosed while highlighting that they can avoid disclosure by issuing advice as an email, rather than in “memorandum form.” Such a practice would implicitly encourage the OCC attorneys to circumvent the rules.

      The OCC Has No Systems to Ensure All PMTA Are Timely Identified, Processed as PMTA, and Disclosed

      The OCC’s response also acknowledged that it has no system to determine whether the attorneys who issue PMTAs have provided them to the function responsible for making disclosure determinations (e.g., OCC attorneys assigned to Procedure & Administration (P&A)) and no guidelines for how quickly PMTAs must be sent to this function and posted. It noted that PMTAs are generally processed quarterly. As a result, PMTAs may be posted long after the IRS has implemented the advice—and long after it could benefit taxpayers and their representatives (e.g., by avoiding positions that would incur penalties or ensnare them in audits or litigation). Moreover, the lack of any timeliness goals makes it difficult to determine (assuming OCC’s management exercises any oversight) whether a particular PMTA was withheld or whether its disclosure was merely delayed.

      Parting thoughts

      The problems with the transparency of the OCC may be due to the fact that some of its leaders believed in 2018 that “[T]he issue of whether the Office of Chief Counsel is releasing advice in compliance with court decisions interpreting the FOIA and the process for performing that function is not a problem….” I look forward to working with the OCC’s new leadership to develop clear written guidance that defines when advice constitutes PMTA that must be disclosed, close the loophole for emailed advice, train all of the OCC’s attorneys on the new procedures, and establish a process to ensure advice that should be disclosed as PMTA is being identified and disclosed in a timely manner, without regard to whether the IRS would like the advice to be disclosed. OCC could easily use the same internal systems that are in place to disclose Chief Counsel Advice to field employees.  Anything short of these steps will violate taxpayers’ right to be informed. Contrary to OCC’s formal response, this situation is, indeed, a most serious problem for taxpayers.

      The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate is appointed by the Secretary of the Treasury and reports to the Commissioner of Internal Revenue. However, the National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.

    • Register now for the 4th International Conference on Taxpayer Rights in Minneapolis, Minnesota, May 23-24, 2019

      Register Now for the International Conference on Taxpayer Rights

      The National Taxpayer Advocate of the U.S. Internal Revenue Service is convening the fourth International Conference on Taxpayer Rights on May 23-24, 2019, in Minneapolis, Minnesota. The conference is hosted by the University of Minnesota School of Law and sponsored by Tax Analysts and American College of Tax Counsel, with technical assistance by International Bureau of Fiscal Documentation.

      The conference brings together government officials, scholars, and practitioners from around the world to explore how global taxpayer rights serve as the foundation for effective tax administration. For two days, speakers, panelists and attendees will explore the role of taxpayer rights in the digital age, and the implications of the expanding digital environment for transparency, certainty, and privacy in tax administration.

      Panel discussions will focus on the following and more:

      • Taxpayer bills of rights around the world, and the foundation of taxpayer rights in human rights
      • Taxpayer rights and establishing global common standards
      • Big data, privacy and tax administration
      • Impact of administrative guidance on taxpayers
      • The role of “whistleblowers” in tax administration

      View the full agenda

      Don’t miss your chance to join the discussions during this global tax conference May 23- 24, 2019. Registration for the conference is now open through May 15, 2019. Visit to reserve your spot and learn more about the fourth International Conference on Taxpayer Rights. All the videos and materials from past conferences are also on the website.

      If you have any questions, please email