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March 15, 2017

To: Chairman Anderson

From: Americans for Tax Reform

RE: H.F. 2336

Dear Chairman Anderson:

I write in opposition to H.F.2336, legislation imposing government controlled


tax preparation on Minnesotans. Instead of supporting proposals that direct the
state to prepare taxes, legislators should look to make the State Free File tax program
permanent in 2017.

Americans for Tax Reform has long supported initiatives to ensure that taxpayers
continue to have access to free tax compliance services in furtherance of
strengthening the American voluntary compliance tax system. However, to achieve
that objective in the optimal way for the public interest, we would urge you to
support making Free File Program permanent.

Free File is an innovative public-private partnership solution to tax complexity


that has already served nearly 50 million taxpayers nationwide and saved an
estimated $1.3 Billion in compliance costs for taxpayers since its inception in 2003
under President Bush. The program offers 70 percent of taxpayers, or those making
less than $64,000 a year, access to electronic filing software provided by leading
private companies free of charge.

The Treasury and IRS sponsor this program nationally, and more than half of the
income tax States across the country have companion Free File Programs which
ensure that eligible taxpayers are able to electronically prepare and file their returns at
no cost for both their State and Federal returns.

Government tax authorities already have responsibility for tax administration,


collections, investigation and enforcement. To ensure proper checks and
balances in our tax system, in the interest of fairness, it is essential that we keep the
power of control of personal and family tax affairs in the hands of the taxpayers
themselves, and not expand the mission of the government tax collector to also
include the preparation of the return itself, either by the State or on State systems.

Despite the success of Free File, some, like Senator Elizabeth Warren (D-Mass.), have
called for the program to be eliminated based on the notion that the government
should be responsible for tax preparation and well as tax collection.

California has already tried to create a state run tax preparation program, and
it has failed. The program, known as CalFile, is paid for entirely by taxpayers yet is
claimed to be free. The program is used by just 150,000 California taxpayers, even
as the state is responsible for 15 million tax returns.
In sharp contrast, states like Virginia and Mississippi have made their Free
File programs permanent. This has succeeded in ensuring taxpayers are protected
long term through the continued separation of citizen tax preparation and compliance
from government tax collection and enforcement. Importantly, the programs in these
states are actually free.

Since its inception, the Free File program has been a success in ensuring taxpayers are
able to comply with the tax code at no cost, while preserving voluntary compliance,
and thus protecting taxpayer privacy, independence and fairness.

Rather than supporting government controlled tax preparation as H.F. 2336


calls for, I urge you to support making the Minnesota Free File program
permanent in 2017. Creating a program of government tax preparation would be a
mistake and would vest the tax collector with even broader power over the paychecks
of American families, creating a huge conflict of interest that works against the
independent interest of the taxpayer.

Onward,

Grover G. Norquist
President, Americans for Tax Reform