Tax Season: Online Tax Preparation Site Charges Individual Eligible For Free eFile

If your Adjusted Gross Income was less than $52,000 last year, you are eligible to file your taxes for free. Don’t let anyone tell you otherwise. Reader F writes in to share his experience with online tax preparer FileYourTaxes.com:

Last year I filed through fileyourtaxes.com, a participating company, and everything worked fine. This year, I went straight to fileyourtaxes.com to file again. I entered all my information (taking probably 1 to 2 hours total) and then at the end, after entering everything, I was told I’d be charged $32.75 for my federal taxes and $32.75 for my state taxes. After traveling around the website for a while I finally found a page that said that to use the freefile service, I had to land on their website by clicking a link on the IRS freefile site.

The IRS maintains a list of tax preparation sites offering free eFile to those who qualify. Eligibility varies from site to site, but most, despite being on the list, will try to charge for submitting electronically.

FileYourTaxes.com tells Reader F “we must charge,” inside…


Reader F’s full email exchange:

Hello,

Last year I used your service to file free and it worked fine. This year, after filling out my entire return, I got to the final submit return screen and got a message that I had to pay to file both my Federal and State returns.

After searching your site at length I finally saw that I needed to arrive at your page from the IRS page, so I tried doing that, but still, I’m being charged the fee. I’m also not clear why I should be charged for the state filing at all.

Let me know what I can do to have my tax forms submitted without paying $60+. Thank you very much for your help! Your system is very clear and easy to use.

It is mandatory to be referred to us electronically from the Free File page of the IRS website to initiate the return process, via the Internet to qualify for the free offer.

The system automatically flags such referral.

Please use the following link to find answers to your question(s) regarding the free file option and are qualification criteria.

http://www.FileYourTaxes.com/FFATerms.html

This is also available to you on our home page via the “Free Services” link.

http://www.FileYourTaxes.com/FreeSvs.html

Thank You for Choosing FileYourTaxes.com

The Taxman
taxman@FileYourTaxes.com

Right. I understand.

But at this point, I’m not sure what to do. Do I need to delete everything I’ve entered for 2006 and re-enter the site from the IRS site. What value can that possibly have at this point?

Unfortunetly the system will try to charge you regardless.

Thank You for Choosing FileYourTaxes.com

The Taxman
taxman@FileYourTaxes.com

I understand the problem, but…

SO are you saying I should delete all my data and re-enter it after being referred by the IRS? Or if I do that, the system will still try to charge me? How can I get around that at this point? Surely you can manually override this function of the system – as in the case when you must issue a credit for any user.

Is this something I should contact the IRS about directly – letting them know that due to your system, I cannot file free even though I am eligible to?

I’m sorry, I’m just really confused.

There is no way to reverse the process.

Thank You for Choosing FileYourTaxes.com

The Taxman
taxman@FileYourTaxes.com

So you’re saying that now I cannot file with you unless I pay over 60 dollars to do so? Frankly, I do not believe that the process is not reversible. Your company is perfectly capable of either choosing not to charge me, or of simply charging me and then issuing me a credit in the amount that I pay.

As part of our agreement with the irs if you do not follow the link we must charge.

Thank You for Choosing FileYourTaxes.com

The Taxman
taxman@FileYourTaxes.com

The situation is unfortunate, but unsurprising. If you are going to file electronically for free, be prepared to start from scratch each year.

Last year, we visited various preparation firms through the IRS website, but could not get anyone to file our taxes for free. Each firm would let us preview the tax forms and would offer to submit them, for a price. Exasperated and wanting to be done with our civic duty, our solution was to copy the data from the preview forms by hand onto the real forms, which we mailed. The IRS took our money without complaint. — CAREY GREENBERG-BERGER

FileYourTaxes.com
IRS Free File

Comments

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  1. catskyfire says:

    Same thing, more or less, happened to me through HRBlock on the e-filing. If I used my user id and imported last year’s stuff, there would be a charge. So I just created a new account and entered my address and job info all over again. Then there was no charge.
    I wouldn’t be surprised if ‘returning e-filers’ get snagged by a lot of companies this way.

  2. GiselleBeardchen says:

    So far as I know no IRS free file affiliate will file your state tax return for free—that’s their angle for agreeing to participate in the IRS program for free—hoping that you’ll go for the convenience of filing your state with them—for a fee.

    Fortunately many states allow you to file online directly with them, for free, regardless of income. My home state Indiana is one. Check with your State dept of revenue homepage.

  3. KevinQ says:

    As part of our agreement with the irs if you do not follow the link we must charge.

    Well, either that’s just a lie, or other companies have different agreements, because I’ve filed with freetaxusa.com for 3 years now, and each federal filing is still free. I followed a link from the IRS the first year, but each year I’ve gone back, they’ve remembered my information, and then not charged me to file my federal.

    Also, they only charge $10 to file state.

    Freetaxusa.com sounds like what you would name a scam site, but their website is easy to use, and, apparently, cheap.

    K

  4. spinachdip says:

    Giselle, I did my taxes with Turbo Tax via Free File and both IRS and NY State were free.

  5. Ozyman666 says:

    And in case folks are not aware – if you have State Farm Insurance, you can file both state and federal for free regardless of income. (Details at the State Farm website).

  6. CamilleR says:

    Took me 90 minutes to do my federal taxes with my one W2 and 2 1099INT’s. I started off with Turbo Tax which I used free last year after 30 minutes of clicking through pages of possible deductions that didn’t apply to me, they tried to charge me $30. Tried linking to Turbo Tax through the IRS site and again they tried to charge me. The next site I tried I couldn’t find a place to input my 1099INT. Ended up at Free1040TaxReturnx.com which was fast, easy, and free.
    I don’t understand why I can’t just go to the IRS site and file directly through them. I file my state taxes directly to the state.
    I really miss Telefile–5 minutes on the phone and federal taxes were done.

  7. 24fan24 says:

    I too am pretty sure that one must access these free file sites through the IRS’s website in order for it to be free. Sorry :(

  8. TWinter says:

    I’ve used http://www.taxactonline.com for three years now and I’m very happy with it. They do have some charges for anything beyond a simple federal return, but there is a link to the free option from the first page of the site and they point out that there is a charge for the state return. Their most expensive option is the deluxe + state package, it costs $15.95 and includes both the federal and state returns, access to all of their tax tip info, and telephone access to tax advisers. The site is easy to use and I feel like $15.95 is a fair price for the convenience, esp. since you can upload most information from one tax year to the next. The $60 fee they want from reader F is just highway robbery on top of the fact that he thought it was going to be free.

  9. medalian1 says:

    Same problem with esmarttax.com which is now liberty tax … so I dunno if deleting and starting over w/ my account will work, or if I need to start fresh with a new account. Utter bullshit.

  10. HawkWolf says:

    I went to go to Turbo Tax’s tax freedom thing, and it only would let me do it for free if I made less than 24k, not 50k.

    I sucked it up and just paid because I’m lazy.

  11. holocron says:

    I just want to CONFRIM the Stafe Farm freebie. You have to sign up for their online services. Which just means you have to register online. It doesn’t mean you have to do anything else online. When you do this, you get a link to “FREE Tax Filing”. You must use this think to get it. You get Turbo Tax Basic or Delux + State Online for Free. You also get free e-file for both Fed and State. I did this. Worked great. All free. I already got my state refund direct deposited. A small perk, but a nice perk.

  12. swvaboy says:

    If you follow the IRS Free File link above and then select Guide me to a company, it will let you know the firms that will EFile your state tax as well.(you have to answer about 5 questions first)

    That is how I filed both for free.

  13. any such name says:

    Do a test-run on paper and do your calculations (10 minutes), then go and input that information online (15 minutes or so).
    I used TaxAct this year based on a recommendation in a previous post, and despite several attempts to try and get me to pay (you just have to pay attention and click no, or next or whatever), it was pretty simple.
    And I got my refund this past Friday. :)

  14. disavow says:

    “I don’t understand why I can’t just go to the IRS site and file directly through them. I file my state taxes directly to the state.”

    Originally that was the plan, but then the tax preparation industry convinced the IRS to let them take over. Lobbying > logic.