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H&R Block to change IRS relationship, free tax filing offerings

Brittany De Lea

Tax preparation company H&R Block has decided it will no longer participate in an IRS sponsored program to provide free filing options to low-income Americans, executives said during a conference call on Tuesday.

Individuals with incomes of $69,000 or less are eligible to use the Free File program — a partnership with third-party preparers. About 70 percent of taxpayers qualify, according to the IRS.

“We think we’re leaving the program on strong footing, having three years of growth in a row,” executives said during the company’s fourth quarter earnings call.

The decision was made “in the best interest of the company,” leaders said.

A spokesperson for H&R Block told FOX Business that the company will continue to help individuals file their taxes for free, through its own product offerings.

"We are proud of our nearly 20-year participation in the IRS Free File Program, and while we will end our participation in the program at the end of this tax season on Oct. 15, we will continue offering taxpayers opportunities to file for free," the company spokesperson said.

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H&R Block executives said the door for the IRS to offer its own free filing software remains open, adding that they don’t believe their decision to leave the alliance makes that outcome any more – or any less – likely.

There are 11 other third-party participants in the Free File Alliance – and H&R Block said it wasn’t aware of any of the decisions of other members.

A Treasury Department spokesperson did not immediately return FOX Business’ request for comment.

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The Free File program has been the source of controversy throughout recent years, after ProPublica reported that some companies were engaging in deceptive practices and obscuring their free products from organic searches online.

A follow-up report showed that five of the 12 members of the program used a coding device to keep their Free File landing pages out of organic searches.

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Lawmakers pointed out last week that the most common way taxpayers find preparation options is through Google search, and 85 percent of people click on advertisement links that promote commercial products on Free File Alliance members’ websites. “Only a fraction” of total visits were routed from Google directly through to a company’s Free File product.

According to the IRS, about 57 million taxpayers have used the program since its debut in 2003. In 2018 alone, however, more than 100 million taxpayers met the criteria for the free filing option.

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