The IRS has decided not to go forward with a proposal to allow taxpayers to use a portion of their tax refund to pay for tax preparation services.
David Williams, director of the IRS return preparer office, said June 28 that although the Service had announced last year that it would explore the concept, it would not pursue it at this time. “Since then, the IRS has conducted outreach to numerous parties, including consumer advocates and industry groups,” Williams said. “During that outreach, the IRS heard a variety of views, some supporting this additional option for consumers, with others raising operational and/or policy concerns.” Ultimately, the decision was made not to go forward at this time.
The possibility of steering a portion of a taxpayer's refund directly to the preparer was announced last year. Consumer groups were opposed to the proposal because of concerns that “predatory tax preparers” might be encouraged to charge more for tax preparation because a taxpayer's refund will not be as visible or accessible once it has been turned over to the tax preparer.