The IRS has spent the past nine months studying whether U.S. taxpayers want to see a free, e-filing system run by the government — and is now preparing to launch a pilot program.
NEW YORK — Most taxpayers are interested in filing their taxes directly to the IRS for free, a new report says, and that option will be tested next year.
There are still few details available about the pilot as the agency determines the basic structure, but Werfel said that members of the public will have the option to participate. as part of the funding it received from the Inflation Reduction Act, Democrats’ flagship climate and health care measure that President Joe Biden signed last summer. It gave the IRS nine months and $15 million to report on how such a program would be implemented.
The new, direct e-file program being tested “could potentially save taxpayers billions of dollars annually,” said Blatchford, who noted that an individual taxpayer pays an average of $140 preparing their tax returns each year. “We believe today’s announcement is a significant step toward revolutionizing access to the tax system so that it is easier and more equitable. A free and simple direct file service will ensure that more families in America receive the tax benefits they are eligible for,” Amanda Renteria, CEO of civic tech nonprofit Code for America, said in a statement.
There’s also concern about historic racial disparities and bias seen in the IRS’s enforcement of tax laws. In a Monday to U.S. Senators, for example, Werfel confirmed the IRS found that Black taxpayers may be audited at higher rates. An Associated Press analysis shows that Intuit, H&R Block, and other private companies and advocacy groups for large tax preparation businesses, as well as proponents in favor of electronic free file, have reported spending $39.3 million since 2006 to lobby on “free-file” and other matters. Federal law doesn’t require domestic lobbyists to itemize expenses by specific issue, so the sums are not limited to free-file.
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