Tax Software Developer initiates Free Open-Source Tax Software Project
Preparing and e-filing taxes will soon be free for everyone from taxpayers to accountants, according to the Tax Code Software Foundation, Inc., who publicly announced plans today that it will start a community based open source tax software program akin to open source operating system Linux, the royalty free alternative to Microsoft Windows. Tax Code Software foundation hosts a website (www.taxcodesoftware.org) for all activities relating to the Foundation.
According to its Articles of Incorporation, Tax Code Software Foundation was incorporated December 1st 2005
with the following charitable purpose:
“To lessen the burdens of government and reduce the complexity and the expense of tax preparation and e-filing for all persons
who prepare taxes for themselves or on behalf of another person, by creating open-source, public access, royalty free tax
preparation and e-file software. The benefits of such software inure to the entire tax administration system by ensuring tax
software is accurate, secure, publicly accessible, and fair.”
The Foundation was started by Richard L Braman, Jr. a Certified Public Accountant in Florida who has over 10 years of experience in programming computer software systems mostly spent developing an e-commerce systems including internet toolbar with over 2 million users and Jabber, the open source instant messaging system. Most recently, Braman operated Braman Tax Services, Inc., a small online tax service located in Florida that joined the IRS Free File Program in 2003, and prepared almost 20,000 returns, many for free, through the program during 2003 and 2004. Braman used this time to become familiar with the tax software and broader tax preparation industry leveraging his knowledge of taxation learned while obtaining his master degree in taxation, and his knowledge of computer software.
IRS Free File is free online tax preparation and electronic filing program through a partnership agreement between the IRS and the Free File Alliance, LLC. Braman joined the program in 2003, its second year. Braman became concerned over various aspects of the program from the first time he heard about it. "To me it seemed impossible for a group of competitors could act an alliance of online tax preparers offering free service", said Braman. Braman said that tensions mounted in the group after one of the Alliance member companies decided to offer its software free to all users, with no restrictions. "There was a division in the group over the purpose of the Alliance and the scope of the program, with different competing interests struggling for power and policy control to protect the various companies’ franchises".
Braman says that other contentious issues surrounding the program have included:
- The use of taxpayer information in marketing other products such as Refund Anticipation Loans, mortgages, IRAs, and others.
- The terms of Refund Anticipation Loans and how the product is presented to taxpayers
- The legal consideration over whether online returns should be considered self prepared by the taxpayer or paid prepared, and thus signed by the tax software company.
- The tier system used by the Alliance to allocate website traffic based on capital contributed and percentage of free service provided
- The functionality and security of each company's software , and
- Issues relating to the price of state returns when the federal return is free, state free file alliances.
- The use of an electronic indicator for the IRS to determine whether a free return was generated by the IRS website.
- Cooperation with State revenue agencies and State Free File Programs.
Braman withrew his company from the Free File Alliance, LLC at the end of 2005 citing frustration with the way the program was being operated. Braman says that "The only real solution is to make tax software royalty free, open source for the general public to use, which is why I founded TCSF. We are going to do a great service for the entire taxation system. Tax software is a kind of public utility, like a computer operating system, that should be open and free."
Braman says that many tax software companies may be disgruntled about open source tax software, noting that tax software companies supported provisions in the IRS Restructuring and Reform Act of 1998 to prohibit IRS from summoning tax software and source code in connection with an examination of a return, unless specific requirements were met. But he adds that smart tax software developers will support the program because it will ultimately lower their software development costs. Braman says that open source business model works because it levels the playing field and provides commercial entities opportunities to provide better service and support to consumers.
The open source business model opens an opportunity for the entire tax administration to create a truly great community developed software program for the purpose of reducing the burden of every citizen’s basic duty of filing their taxes. Braman encourages taxpayers, tax professionals such as CPAs, Enrolled Agents and Tax Attorneys to join the foundation as a member, which is free. Prospective members should contact Richard Braman at rbraman@taxcodesoftware.org or at 561-748-4002.
