Nearly Half of Online ‘Free File’ Tax Services Fail Security Audit

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More potentially bad news for taxpayers: Those who file their taxes electronically through free programs should be especially cautious this year.

Six of 13 free e-file tax services that participate in the IRS’ Free File program failed a recently released audit by the nonprofit Online Trust Alliance (OTA).

The IRS’ Free File program enables people who earn less than a certain threshold to file their taxes online for free. This year, that threshold is $62,000.

OTA’s audit evaluated the 13 e-file tax services in three main categories:

Consumer protection: Protection of email via authentication and encryption between servers, and protection of domains from hijacking

Site security: Server security, use of encryption for Web sessions, protections such as firewalls and potential site vulnerabilities

Privacy: Data sharing, retention, notice and third-party restriction policies in the privacy policy, as well as analysis of third-party tracking on the site

Each service was deemed to have either made the “honor roll” — meaning it earned an overall score of at least 80 percent — or to have failed the audit. There was no middle ground.

The seven services that made the honor roll are:

  • eSmart Tax
  • ezTaxReturn.com
  • FreeTaxUSA
  • H&R Block Free File
  • TaxAct
  • TaxSlayer
  • TurboTax Free File

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The six services that failed the audit are:

  • 1040.com
  • 1040Now.net
  • FileYourTaxes.com
  • Free1040TaxReturn.com
  • Jackson Hewitt Online
  • Online Taxes at OLT.com

CNBC reports that Tim Hugo, executive director of the Free File Alliance, which represents the 13 websites that do not charge eligible taxpayers, said in a statement:

“All Free File companies are evaluated and tested each year to ensure that they meet IRS standards addressing every aspect of security and privacy.

“Our members, working with the IRS, will carefully examine this report and take its recommendations under consideration in our continued efforts to ensure that Free File offers the industry’s most innovative and secure tax software.”

To learn more about filing your taxes, be sure to check out Money Talks News’ new course taught by Stacy Johnson: “Mastering Taxes: Slash Your Taxes and Have Fun Doing It!” (Readers can save 28 percent via that link.)

Do you use the IRS’ Free File program? Let us know below or on Facebook.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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