- Monday, June 12, 2023

As a former member of the House Ways and Means Committee, which sets tax policy and oversees the IRS, I couldn’t be more disappointed with how dishonest the agency now appears. Simply put, America’s tax bureaucrats are scheming for more operational power.

The IRS recently announced that it will prepare the taxes of select Americans who make under $125,000 in the upcoming tax year. It will do this as part of a pilot program to determine whether it can become the entire nation’s tax preparer in the coming years.

Sounds great, right? No more need for accountants or tax preparation software. No more need to pull troves of statements and documents to pay the federal pipers. Uncle Sam will take care of everything for you.

Not so fast. If this idea were such a great one, the IRS wouldn’t have to move mountains to avoid the scrutiny of the House Ways and Means and Senate Finance committees. And that’s exactly what it appears to be doing.

On April 19, IRS Commissioner Daniel Werfel testified before Congress that “no decision has been made on moving forward with direct file solution.” If that’s the case, how is it that less than one month later, the IRS announced the forthcoming launch of the Direct File pilot program? That sounds like duplicity, not transparency.

The IRS has every reason to hide whatever it can from Congress and the American people about this initiative, because the simple truth is that Direct File is a terrible idea.

The IRS exists to maximize the nation’s tax revenue. It’s not an entity that you or your loved ones should expect to have your best interests at heart.

The agency is also known for being notoriously sloppy and inaccurate in ways that benefit — surprise, surprise! — the federal government, not hardworking taxpayers.

A Treasury Department investigation of IRS practices showed that on the 43% of occasions where investigators posed as taxpayers asking the IRS for tax help, they received incorrect information or no information at all.

Another study cited by CBS found that the IRS gave inaccurate information to 73% of auditors contacting IRS help centers. Common IRS mistakes include confusing the taxpayer with a relative, not applying automatically granted extensions (potentially resulting in late charges), and clerical errors by government workers entering information.

So it shouldn’t surprise anyone that most taxpayers hate the idea of the IRS becoming the nation’s tax preparer.

A 2022 study from the MITRE Corp., the organization that operates many federally funded research and development centers, including the Treasury’s, showed that the public — due to agency mistrust — wouldn’t want the IRS to file its tax return. But the IRS chose not to release this 2022 study until last month — days after Fox News reported its existence.

The agency — seemingly in full-out damage control mode — later claimed that it never commissioned this study, but Congress understandably finds this hard to believe.

As Ways and Means Committee Chairman Jason Smith put it: “It’s alarming that the Biden IRS has not come forward and been transparent about MITRE’s independent findings when the Inflation Reduction Act itself calls for a truly non-partisan, independent, third-party review of the feasibility, the cost to develop and operate such a system, the IRS capacity to run such a system, or taxpayer opinions on the matter.”

Instead of accepting the findings of a nonpartisan group, the IRS commissioned the New America Foundation. This think tank previously endorsed the concept of Direct File to “study” this idea. Naturally, the group’s “analysis” found that the Direct File system “might create opportunities to ease the burden of tax filing for Americans.”

Collaborating with Congress to carefully assess the feasibility of this policy proposal is one thing; obscuring the truth and cooking the books to make it happen is another.

The IRS is already getting into enough trouble as a tax collector and auditor. The last thing we need to find out is what will happen when the agency, which just received $80 billion to increase audits on taxpayers making less than $75,000 a year, becomes America’s preparer and filer.

The legislative branch can’t permit these IRS power grabs to continue. It must assert its oversight authority and disconnect Direct File before it’s too late.

• J.D. Hayworth is a former six-term Republican member of Congress. He was the first Arizonan in history to serve on the House Ways and Means Committee.

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