Some Users of Free Tax E-Filing Say the 'E' Doesn't Stand for 'Easy'

The Internal Revenue Service's new free e-filing program is giving some Americans yet another reason to hate tax season.

Less than a month old, the alliance between the IRS and private tax preparation firms that was designed to encourage more Americans to file their tax returns online is drawing some sour reviews.

Among the gripes: Some taxpayers said they have been charged for services they thought were free. Others said they ran into technical problems and gave up trying to file their return after hours of trying. Still others complain that they had to buy additional services to get the free tax-filing service.

Computer programmer Rance Naffziger of Tucson got so frustrated while trying to file his return electronically last month that he ended up filing a paper return by mail.

"I know electronic filing is supposed to be the wave of the future, but I figure I can wait another year," he said. "I'm happy knowing that the paper copy I sent in stands a decent chance of being read by a government official and having them get back to me."

IRS officials acknowledge there have been problems with the fledgling service, but say the complaints account for a tiny fraction of e-filing volume and are largely attributable to growing pains. "This is obviously new for all of us," said Terry Lutes, director of electronic tax administration for the IRS. "It is a learning experience for us and a learning experience for some of the companies."

The free e-filing initiative is part of an IRS program that's been in the works for more than a year. The agency, which had once contemplated providing free electronic filing direct to the public, agreed late last year to offer the service through a partnership with several private firms.

The IRS' partners range from brand names such as H&R Block Inc., Intuit Inc. and CCH Inc. to relative unknowns such as ESmartTax and FreeTaxReturn.com. The partners agreed to offer free e-filing to at least 60% of the nation's taxpayers in return for the marketing boost involved in being an IRS affiliate.

Consumer groups were suspicious of the plan, saying that tax firms were likely to use it as a way to market other, for-fee services.

But complaints from consumers have focused on other issues, including software glitches and getting charged for services they thought were free.