Did you know that the Internal Revenue Service (IRS) has agreed to a 4-year partnership with 19 online tax software companies? This partnership agreement has been named the Free File Alliance.

The Free File Alliance, was first formed in October of 2002, making free tax programs available to millions of American taxpayers. The (IRS) Free File program lets taxpayers that meet the guidelines file their taxes for free.

An estimated 70 percent of all tax filers are eligible to use the free filing programs offered within the alliance. The new agreement allows Americans with an adjusted gross income (AGI) of $52.000 or less to use the free tax programs to file their taxes for free.

Why is the IRS doing this?

Because, the Federal Government has a goal of 80% of all tax returns processed, be filed electronically by year 2007. The reasons for using electronic tax returns processing are many. Here are a few of those reasons:

* Less is time spent preparing taxes. Free tax programs are designed to save you and the IRS time.
* Refunds are faster and can be electronically deposited into your bank account.
* It's a compelling way to introduce taxpayers to the new method of preparing and filing taxes online.
* Since 2003, the Federal Government has saved more than $32 million in processing costs by offering free tax programs online.

The main purpose of the Free File Alliance is to provide a free tax filing program, for those who can least afford to pay for online tax preparation and e-filing.