2017-19

Regarding Free Online Tax Preparation and Electronic Filing

REPRESENTATIVE DAN PABON (CO), CHAIR BANKING, AFFORDABLE HOUSING AND CREDIT TASK FORCE

Sponsored by: Rep. Dan Pabon (CO)
Cosponsored by: Rep. Carlos Tobon (RI)

WHEREAS, a program that is important to the citizens of the United States is in jeopardy as the result of decisions being proposed in the United States Congress; and,

WHEREAS, twenty three of our states that have an individual income tax have implemented an innovative solution to meet the needs of the low-income, disadvantaged, underserved and working poor taxpayers many of whom 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, private corporate citizenship and community based organizations have worked together in an era of fiscal limits and new challenges; and,

WHEREAS, the State Free File online tax program is based on an agreement reached between the Internal Revenue Service and the American software industry, whereby working poor and other lower income and underserved families and individuals are able to obtain free electronic tax preparation and electronic filing for their federal and state tax returns; and,

WHEREAS, according to the last US Census report, as of July 1, 2015, the Hispanic population of the United States was 56.6 million, making people of Hispanic origin the largest ethnic minority, comprising nearly 18% of the nation's total population. In addition, the median adjusted income for households headed by Hispanics in 2014 was $43,300, well within the current Free File Adjusted Gross Income limit of $64,000; and,

WHEREAS, the program saves State budgets the very high cost of creating alternate on line government tax preparation and filing services. Twenty-three states have each decided to create a Free File Alliance public-private partnership solution, creating Free File programs in their states. This has saved state governments many hundreds of millions of dollars in expenditures, while providing free services to those who need them; and,

WHEREAS, the Internal Revenue Service 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-two Free File states; and,

WHEREAS, that same Internal Revenue Service program has since developed some significant management and operational reforms to improve the Free File programs, as well as the Federal program, and these reforms need to be supported and rigorously implemented, ensuring that Free File is free of sales, marketing or advertising of any products and services other than a tax return, and affirming that no products other than tax returns should be offered or provided through this program.

THEREFORE, BE IT RESOLVED, that the public and the States rely upon the Internal Revenue Service vetting these companies before holding them out for use through their website; and,

BE IT FURTHER RESOLVED, that The National Hispanic Caucus of State Legislators strongly recommends that the new policy of prohibiting sales or marketing or advertising or offering of products other than tax returns should be encouraged and enforced, 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 should not 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; and,

BE IT FURTHER RESOLVED, that companies participating in Free File should be required to meet the same time-tested Federal standards for corporate responsibility and commerciality that are a basic requirement for the government's own purchase of commercial services; and,

BE IT FURTHER RESOLVED, that copies of this Resolution be transmitted to the President of the United States; the President of the Senate of the United States; the Speaker of the US House of Representatives; the Majority Leaders and Minority Leaders of the US House of Representatives and US Senate; each member of the US House and Senate of the United States; the US Secretary of the Treasury; the Commissioner of Internal Revenue; the Chairman and Members of the US House Committee on Ways and Means; the Chairman and Members of the US Senate Finance Committee; the Chairman and Members of the US House Committee on Appropriations Subcommittee on the Treasury; the Chairman and Members of the US Senate Appropriations Subcommittee on the Treasury; the President of the Senate, the Speaker of the House and the Governors of the Twenty-Three Free File states; and,

BE IT FINALLY RESOLVED, that this Body urges the United States Congress and the President of the United States to take immediate action on this resolution.

THIS RESOLUTION WAS ADOPTED ON AUGUST 9, 2017, AT THE NHCSL EXECUTIVE COMMITTEE MEETING HELD IN BOSTON, MA.