In October of 2002, a 3-year partnership agreement between a group of tax software companies including Turbo Tax and the Internal Revenue Service (IRS) was formed. This partnership was formed to provide a free Federal tax filing program for at least 60 percent of American taxpayers. This program is known as the Free File Alliance.

In October of 2005, the IRS and the same group of tax software companies reached a new four year partnership agreement for free filing of taxes online. The new Free File Alliance agreement continues to provide free Federal tax filing to those who have an adjusted gross income (AGI) of $52.000 or less. This amount will vary among the tax software partners.

Why is the Internal Revenue doing this?

• The IRS has a goal of 80% of all Federal tax returns to be filed online by the year 2007. Currently over 70 million people are filing their taxes online.
• The Federal Government believes that electronic tax preparation provides a more accurate way of preparing and filing taxes.
• The Federal Government also believes that a partnership with existing tax software companies will provide the the best service to taxpayers.

The Free File Alliance provides free federal tax filing and preparation at no cost to those who qualify. 

• If your adjusted gross income is less than $52.000 or,
• You qualify for the earned income credit (EIC) for tax year 2006, then you qualify for the free Federal tax filing program or,
• You are an active Military, Reservist, or National Guard member whose gross income (AGI) for 2006 is less than $52.000.

Filing Taxes Online – Free Federal Tax Filing Program is a post from: File Tax Help