FROM THE OFFICE OF PUBLIC AFFAIRS

Today Treasury announced that an agreement has been signed that will allow up to 78 million taxpayers to file their tax returns electronically without charge.  The agreement between the IRS and Free File Alliance, LLC was signed today by IRS Commissioner Charles Rossotti and Free File Alliance manager Mike Cavanagh. Under the agreement, tax software companies will offer at no charge on-line tax return preparation and filing services to a significant portion of American taxpayers.  The IRS will provide taxpayers links to these free services through irs.gov and firstgov.gov.  The final agreement along with IRS’ response to the public comments on the draft agreement was posted in the Federal Register.

"We are one step closer to allowing millions of taxpayers free electronic filing of their tax returns," stated Treasury Secretary Paul O'Neill. "I look forward to the public launch of the website in January."

"This represents an important step forward for taxpayers and our e-filing efforts.  This will give millions of taxpayers free access to preparation and e-filing,” stated IRS Commissioner Charles O. Rossotti. "As the filing season approaches, the IRS will continue working with the Alliance to implement this important initiative.  This joint effort will help even more taxpayers benefit from e-filing.”

Free federal electronic filing of tax returns is pro-consumer and pro-taxpayer. Up to 78 million Americans stand to benefit from this free service. This initiative was launched as part of the President's budget last year. The President has also proposed a 15 day filing extension for all taxpayers who file electronically, including those eligible for free filing under this initiative. That proposal has not yet been approved by Congress.

Specific details about the e-file programs in the initiative will be available later.

The text of the final agreement is attached.