Has the IRS Stepped Over the Line?

A proposal by the Internal Revenue Service has tax preparation software companies and the technology industry up in arms.

The Service is asking tax software companies to offer taxpayers 'free' tax preparation and electronic filing services in exchange for providing easier access to individuals' private tax records.

While this doesn't seem inherently out of order, software companies believe the IRS may someday be a competitor in offering the same services. Already, the IRS has asked companies to cooperate, and if they do, they could be compensated in some form or fashion.

This leaves industry analysts baffled as to the IRS' motivation for such a move. To justify the action, the IRS says taxpayers would rather work directly with them rather than go through a third-party to file taxes.

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