We’re a little closer to being able to file our taxes directly with the IRS. The agency just submitted a report to Congress detailing plans to launch a test run of free government-run tax filing software for the 2024 tax filing season. If the free Direct E-File system is successful and the government rolls it out to the rest of the country, we may be able to sideline tax filing giants like Intuit in filing tax returns without poring over endless, complicated calculations.
Who knows? It might even open the door to pre-filled tax forms that we just need to confirm, rather than anxiously filling in figures already known to the government. After all, the IRS seems to know when you’ve done something wrong. So why not just let him tell us what we owe or even what we’re getting back?
According to the press release, the IRS was directed by the Treasury Department to begin the pilot program, which will involve an unspecified number of taxpayers, to gather more information about the IRS’s ability to administer such a system.
Adopted last year, the report (PDF) is required under the Inflation Reduction Act and breaks down how difficult it would be to develop direct filing options, what it would cost and surveys taxpayers’ opinions about it Program. Ultimately, the IRS concluded that “many taxpayers are interested in using a free tool provided by the IRS” for tax collection, and that creating such a tool is within its ability, provided it has a permanent presence in the state budget .
IRS Commissioner Danny Werfel, who submitted the report to Congress, was quoted in the press release as saying that government-run direct file programs are common in other countries:
“The IRS strives to provide significantly improved services by providing taxpayers with tools, information and support that will make it easier for them to comply with their tax filing obligations. Direct File – used by numerous tax jurisdictions around the world – has long been discussed as an option to improve the customer experience for US taxpayers,” said IRS Commissioner Danny Werfel.
This news is the latest chapter in an ongoing saga whose recent roots lie in a sensational 2019 ProPublica report that detailed how e-filing companies like TurboTax inventor Intuit have been working to give the public the… Deny access to free, easy archiving alternatives.
In short, ProPublica showed how companies like Intuit broke an agreement with the IRS in which they promised to give low- to middle-income taxpayers free direct filing options, all in exchange for letting the IRS did not create their own program of this type. And they created them – they just didn’t link to them or talk about them and added code that would prevent them from showing up in Google Search.
Following ProPublica’s report, the IRS updated the Free File Agreement to specifically bar business tax preparation companies from hiding these pages, while removing its own obligation to let companies like Intuit and H&R Block create simple filing software. The IRS could now create its own program.