The IRS officially began accepting tax returns Tuesday from residents of 12 states through its new Direct File program, a free tax-preparation system meant to give taxpayers an option other than paying for services such as TurboTax.
The idea has long been a favorite of many taxpayers and congressional Democrats, though Republicans worried it could give the tax agency too much control over Americans’ finances.
Direct File, like other software options, prompts taxpayers to fill in their income and deductions, prods them on certain tax issues then calculates what they owe based on those answers.
IRS Commissioner Danny Werfel said the agency has been testing the program for several weeks with some government employees and had good feedback. The program is now open to taxpayers in 12 states.
“Our goal with the Direct File pilot is to help people meet their tax obligations as easily and quickly as possible,” Mr. Werfel said. “We developed Direct File from the beginning with taxpayers’ help, and we’ll continue to talk to taxpayers about their experience to learn more about what taxpayers want for future digital services.”
The states where taxpayers can use it are Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
The current version can be used by taxpayers who have regular wages, Social Security income and $1,500 or less in interest income and who claim the standard deduction.
Those taxpayers who itemize or claim tax the Earned Income Tax Credit or the Child Tax Credit cannot use it.
The IRS figures some 18 million taxpayers in the eligible states can use it.
Members of Congress have sparred over the idea of an IRS-run tax preparation option.
Democrats finally forced the matter in their budget-climate law, passed in 2022 without any GOP support. That legislation called for the IRS to study the issue, which the agency did — and concluded it wanted to move ahead with the idea in practice.
“This pilot program is simply a way to expand the power of the IRS that no one asked for, especially considering Americans already have numerous options for filing free tax returns,” said Rep, Jason Smith, Missouri Republican and House Ways and Means Committee chairman.
He said the Biden administration wrongly “tipped the scales” of the IRS’s own feasibility study in favor of Direct File, and he said there are still too many unanswered questions about the program’s cost as it expands to all taxpayers.
Mr. Smith suggested the program is susceptible to legal challenges, too.
But Democrats cheered the pilot program as a historic step.
“Today’s launch is another example of how Ways and Means Democrats have proudly fought to ease taxpayers’ burden, deliver more comprehensive services, and build a fairer tax system for all,” said Rep. Richard Neal, Massachusetts Democrat.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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