Should you get out of the “Fast Refund” business?

 If you are an independent tax business owner who is capable of preparing complex tax returns, the answer may be “Yes”.

The latest proposal is for IRS to develop its own free tax preparation software to “cut-out the middle man” (tax preparers).  I was serving on the IRS Electronic Tax Administration Advisory Council when the Free File alliance was formed as an alternative to IRS creating its own tax preparation software.  It was a big topic of discussion.  I don’t think it makes sense for IRS to create its own tax preparation software since Free File is meeting this need.  In my experience, many taxpayers are reluctant to have their returns prepared by the IRS even if the service is free.  If this proposal is given serious consideration, more research should be done to determine how many taxpayers would use IRS tax preparation software.  In any event, I intend to continue to reduce my tax firm’s dependency on low–income and routine tax returns as we have been doing for the past 5 years.  I expect more taxpayers will use Free File and IRS will provide more free bank accounts for them to use direct deposit as an alternative to a RAC.

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