The tax preparers have been beneficiaries of something called the Free File on-line program, which is only free for certain low-income taxpayers, not everyone, and, even then, allows the companies to load up a shopping cart for themselves full of extra fees, including massive predatory Refund Anticipation Loan (RAL) fees and triple-digit interest, so long as there is no fee for actually clicking the button that sends the file off to the IRS.

Everson referred to a harsh letter from Senators Grassley (R-IA) and Baucus (D-MT) he received last week. Excerpt from Sen. Grassley's press release:

"It seems the tax preparation industry was holding all the cards in the renegotiation of this program," Grassley said. "The industry appears to be using the Free File program as an opportunity to bolster its revenue through the sale of ancillary products at taxpayer expense. I'm all for private enterprise, but not when it co-opts taxpayer service. The IRS is losing the game and doesn't even seem to realize it. The IRS' first priority is supposed to be the taxpayer. It shouldn't be taking away from taxpayer service to subsidize the tax preparation industry."

According to some press reports, Everson apparently tried to blame the demise of the program on the companies' greed and complaints about their sloppy tax preparation, forgetting that it was a dumber than dirt idea from the get-go to try and force most taxpayers to pay a private company if they want to file their taxes online. Our previous blog on Free File.