The Free File Alliance is the coalition working with the IRS to provide the Free File Program to American tax fillers. The Alliance is a limited liability company or LLC formed by 19 different tax preparation software companies. Their mission is to provide an alternate way for moderate to lower income American Families to prepare are file their income taxes online in a fast, free, and safe way.

The Alliance helps to give 70% of Americans the option to file their taxes for free with some of the industry's leaders in tax preparation software. In 2007, Alliance members are continuing to work with the IRS to improve the program and agreed to remove controversial ancillary offerings such as refund anticipation loans (RALs).

Because of the partnership with the IRS, the Free File Alliance has allowed for More than 25 million returns to be filed through the Free File program in the past seven years.

In November of 2001, the Office of Management and Budget's (OMB) Quicksilver Task Force established 24 e-government initiatives, which were all part of the President's Management Agenda. The initiatives were intended to improve and expand Government to Government, Government to Business, and Government to Citizen electronic relations and possibilities.

IRS Free File was such an initiative. The IRS was instructed to provide free and secure online tax return preparation and filing services to taxpayers. In accordance with this OMB directive, the IRS began working in partnership with the tax software industry to find a solution. As you can infer at this point, the result was the formation of the Free File Alliance, LLC. A group of tax software companies who provide commercial online tax preparation and electronic filing services was now working directly with the government to provide a free solution to consumers.

The Government believed a partnership with private industry would: provide taxpayers with higher quality services by using the existing expertise of the private sector; maximize consumer choice; promote competition within the marketplace; and meet objectives in the least costly manner to taxpayers.