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National Hispanic
Caucus Of State
Legislators Support
A Resolution To
Provide Free Tax
Filing For Low-Income,
Disadvantaged,
Underserved And
Working Poor
WHEREAS, a program
that is important to
the citizens of the
United States may be
in jeopardy as the
result of decisions
being made in the
United States
Congress; and
WHEREAS, over 40% of
our states have
banded together to
find an innovative
solution to meet the
needs of the low
income,
disadvantaged,
underserved and
working poor
taxpayers. These are
the citizens that
are eligible for the
Earned Income Tax
Credit; and
WHEREAS, this
innovative solution,
called the State
Free File Alliance,
has been developed
over the last decade
where Public need
and Private
corporate
citizenship have
worked together, in
an era of fiscal
limits and new
challenges; and
WHEREAS, the State
Free File tax
program is based on
the Policy Agreement
reached between the
Internal Revenue
Service and the tax
software industry
several years ago,
whereby working poor
and other lower
income families and
individuals are able
to obtain free
electronic tax
preparation and
electronic filing
for their tax
returns; and
WHEREAS, the program
saves the state
budgets the high
cost of creating an
alternate tax
preparation and
filing service, with
all the systems and
costs that would be
required to build,
operate, maintain,
and provide such a
program. Twenty-one
states have decided
to participate in
the Free File
Alliance public-private
partnership solution,
creating Free File
programs in their
states. This has
saved their State
Governments many
millions of dollars,
while providing free
services to those
who need them; and
WHEREAS, the IRS
negotiated the terms
of the national Free
File Agreement with
the software
providers, this
agreement is the
common basis for all
the Free File
programs in the
twenty-one Free File
states; and
WHEREAS, that same
IRS Free File
program has since
developed some
significant
management and
operational
deficiencies that
are adversely
impacting the State
Free File programs,
as well as the
Federal program, and
these problems need
to be urgently
corrected and the
program improved;
and
WHEREAS, we are
concerned with the
IRS limitations of
the Federal program
to provide only free
FEDERAL returns,
while people using
the FEDERAL program
are then required to
pay for their state
returns; and
WHEREAS, we are
concerned that the
IRS rules allow
companies to sell
all kinds of
products and
services within the
program from the IRS
website, including
but not limited to
state tax returns
and high interest
refund loans; and
WHEREAS, we are
further concerned
this laissez faire
marketing and
selling environment
hosted from the
Federal Government’s
website puts the
public, and the Free
File program, at
risk; and
WHEREAS, recent
efforts by the
Senate Finance
Committee to
consider draft
legislation on this
subject are in many
respects inadequate,
and in other
respects misguided.
The legislation,
S.832, would not end
the freewheeling
marketplace that the
IRS website has
become, nor would it
require companies
participating in the
Federal program to
offer both Federal
and State returns to
citizens eligible
for these free
services; and
WHEREAS, of equal
alarm, the
legislation proposes
to require the IRS
to build and deploy
an Internet web
portal for directly
providing its own
electronic tax
preparation services
to the public. The
direct impact of
this provision would
be to end Free File
and replace it with
a new
Government-provided
program instead; and
WHEREAS, the Federal
Government may have
the available funds
to engage in this
kind of duplication
of private sector
capabilities, the
States do not; and
WHEREAS, the State
Free File programs
are directly tied to
the national
agreement underlying
the Federal Free
File program. The
demise of the
national IRS program
would immediately
cascade down to the
States. The States
would be required to
invest in State tax
preparation systems
to replace the lost
free program.
WHEREAS, the
National Hispanic of
State Legislators is
concerned that this
imposition of
unnecessary and
unfunded burden on
the States is
totally
unacceptable; and
WHEREAS, common
sense management
reforms would
demonstrate the
value of
public-private
partnership
innovation and save
the public
treasuries of
governments across
the country many
millions of tax
dollars; and
WHEREAS, Free File
can help people get
access to the Earned
Income Credit, and
in so doing make a
real difference in
helping lift
themselves and their
families out of
poverty. Similarly,
Free File can help
people get better
access to Child and
Elder Care Credits,
and Retirement
savings incentives.
The private sector
is best able to
design and deliver
the consumer tools
to make it easy and
simple to achieve
these objectives,
and that is the hope
of the Free File
concept; and
WHEREAS, that
participating
companies in the
Free File program
should be carefully
screened, so their
listing in the
program really means
something that
people can rely on;
and
WHEREAS, that the
public and the
States rely upon IRS
vetting these
companies before
holding them out for
use through their
website; and
THEREFORE BE IT
RESOLVED BY THE
ANNUAL CONFERENCE OF
THE NATIONAL
HISPANIC CAUCUS OF
STATE LEGISLATORS
(NHCSL), ASSEMBLED
IN San Juan, Puerto
Rico on November
18th, 2006, THAT THE
NHCSL strongly
recommends that no
sales or marketing
or advertising
should be allowed in
the Free File
program consistent
with the Office of
Management and
Budget and General
Services
Administration rules
governing all
Federal websites;
and
BE IT FURTHER
RESOLVED, that tax
return information
cannot be traded,
bartered, rented,
shared or sold; and
that the privacy of
people’s tax return
information is
strictly protected,
with no other use of
that data either
permitted or
possible
BE IT FURTHER
RESOLVED, that
companies
participating in
Free File be
required to meet the
same time-tested
Federal standards
for Corporate
Responsibility and
Commerciality that
are a basic
requirements for the
government’s own
purchase of
commercial services;
and
BE IT FURTHER
RESOLVED, that
participating
companies be
required to continue
to provide FREE
Federal returns,
while directing the
IRS to encourage
those companies to
provide Free State
returns for eligible
taxpayers in those
States that also
have State Free File
Alliances.
BE IT FURTHER
RESOLVED, that
copies of this
Resolution, suitable
engrossed, be
transmitted to the
President of the
Senate of the United
States, the Speaker
of the House of
Representatives,
each member of the
Congress of the
United States; the
Treasury Secretary;
the President of the
United States; the
President of the
Senate and the
Speaker of the House
of the 21 Free File
states; and
BE IT FINALLY
RESOLVED, that this
Legislative Body
urges the United
States Congress and
the President of the
United States to
take immediate
action on this
resolution.
This resolution was
adopted this
November 18, 2006,
at the National
Hispanic Caucus of
State Legislators
Executive Committee
& BBA Annual Meeting
held in San Juan,
Puerto Rico.
Assemblyman Felix W.
Ortiz, NY
NHCSL President |
