Washington, D.C. - The Senate Finance Committee today approved a wide-ranging tax bill which includes several measures introduced by Senator Daniel K. Akaka (D-HI). The packaged bill contains Akaka language from his Free Internet Filing Act. The Act will permit taxpayers to file their taxes through the Internal Revenue Service (IRS) web site without using an intermediary, and protect taxpayers, and expand access to mainstream financial services.
"Taxpayers are dependent on commercial preparers to electronically file their taxes. If a taxpayer takes the time necessary to prepare their returns by themselves, they must be provided with the option of electronically filing directly with the IRS," stated Senator Akaka.
According to Senator Akaka, the current Free File Alliance agreement fails taxpayers. In addition, tax preparation companies market additional products and services to consumers who utilize their free file services which are accessed via the IRS web site.
"In the current environment where there have been so many electronic breaches of financial information, taxpayers should not be forced to hand over their private information if they want to electronically file their return with the IRS," said Senator Akaka. "Taxpayers should not lose out on the benefits of electronic filing simply because they are worried about sending their data to third parties."
The Finance Committee also included a provision from Senator Akaka’s bill, S. 324, the Taxpayer Abuse Prevention Act, which will eliminate the IRS Debt Indicator program. Refund Anticipation Loans carry little risk because the Debt Indicator program informs the lender whether or not an applicant owes federal, state taxes, child support, student loans, or other government obligations. This service assists the tax preparer in ascertaining applicant ability to obtain their full refund.
"I appreciate all of the work of my good friend Senator Bingaman, Chairman Grassley, and Ranking Member Baucus to improve the lives of taxpayers. I will continue to work to bring about the enactment of this landmark legislation," said Senator Akaka.
The Committee also approved, the Taxpayer Protection and Assistance Act. The Act will provide the Department of the Treasury with the authority to regulate individuals preparing federal income tax returns and other documents for submission to the Internal Revenue Service.
The legislation includes an Akaka provision to provide authorization language for a grant program to link tax preparation services for low-and moderate income families with the opening of a bank or credit union account. It is estimated that four million Earned Income Tax Credit recipients are classified as unbanked, and lack a formal relationship with a financial institution.
