Filed and Crimson Tree launch open tax alliance

Filed and Crimson Tree Software have formed the Open Tax Technology Alliance and released two open tax tools: OpenTax, a free federal 1040 engine, and Open Tax Document, an open standard for K-1 and K-3 data. The effort targets a tax software market long dominated by closed systems and could give firms and developers a free path to calculate returns and exchange partnership tax data.

Why it matters: - The Alliance is trying to open up core tax-calculation and tax-data infrastructure that has been closed software for decades. - A free 1040 engine could let firms re-check returns on their own hardware without sending client data to a vendor cloud. - An open K-1/K-3 standard could reduce manual extraction and reconstruction of partnership tax data for investors and accountants.

What happened: - Filed and Crimson Tree Software founded the Open Tax Technology Alliance on Sept. 29, 2026. - The Alliance released OpenTax, a free open-source federal 1040 calculation engine. - The Alliance also released Open Tax Document, an open standard for Schedule K-1 and K-3 data. - Crimson Tree Software joined as a co-founding member and will co-develop both initiatives.

The details: - OpenTax runs as a single binary on macOS, Linux and Windows. - OpenTax does not require an account or cloud dependency. - The engine covers Form 1040 for tax year 2025. - OpenTax includes 186 registered nodes and 131 input types. - The engine handles W-2s, the 1099 series, K-1s and Schedules A, C and E. - OpenTax checks returns against the IRS MeF business rule set. - OpenTax exports Modernized e-File XML. - The source, tests and benchmark suite are public at github.com/filedcom/opentax. - Open Tax Document is published as a public draft at github.com/opentaxdocument/otd-spec. - OTD is a free, open standard for exchanging structured data related to Form 1065 Schedules K-1 and K-3, plus associated footnotes and forms. - The OTD repository includes a complete K-1 taxonomy. - The repository also includes extensible draft taxonomies for K-3 and common K-1 footnotes. - The OTD package includes transmission formats, agentic PDF extraction utilities, document verification tools and other software. - The Alliance designed the OTD materials explicitly for use with modern agentic AI. - The engine is dual-licensed under AGPL v3, with a commercial license available for organizations that prohibit AGPL. - OpenTax’s application to the IRS Modernized e-File system is pending. - If accepted, the Alliance plans to operate OpenTax as a free e-filing route for individuals, firms, developers and AI agents. - Both founders said neither initiative will be monetized. - The Alliance is open to firms, developers and individuals. - Contributors can extend the K-1, K-3 and footnote standards or add more IRS forms to the engine. - Firms that want to build an MeF transmitter on the codebase must contact Filed for written authorization first. - More information is available at opentax.filed.com.

Between the lines: - Filed is arguing that the value in tax software has shifted from arithmetic to workflow and data exchange. - The open-source release also positions the Alliance against a small group of vendors that have sold annual tax software licenses since the 1990s. - Crimson Tree Software is framing partnership tax as a data-exchange problem, not just a calculation problem. - The Alliance is explicitly tying the standard to AI workflows, which could make structured tax data easier for software agents to read and use.

What's next: - The IRS still has to accept OpenTax into the Modernized e-File system before the Alliance can use it as a free filing route. - The Alliance said contributors can expand the standards and add more tax forms over time. - Filed said firms that plan to build an MeF transmitter on the codebase need written authorization first. - The Alliance will continue to operate under an open-contribution model for firms, developers and individuals.

The bottom line: - Filed and Crimson Tree are betting that the next tax software battle is not over calculation accuracy alone, but over open standards, interoperability and AI-ready tax data.