In a move that seems revolutionary, but really isn’t, the IRS is set to
launch a trial of its own free tax-filing system.
The Internal Revenue Service – the IRS – aims to redefine the filing
experience for residents in 12 states. However, this bold move is not without
its naysayers, as commercial tax-preparation companies brace against the winds
of change.
The IRS, known for its less than cuddly demeanor, is unveiling a
surprising twist to tax-filing. Residents in a dozen US states are about to
become part of a grand experiment, a direct filing system where federal tax
returns are submitted online to the IRS, and the best part? It’s free. “This is
a critical step forward for this innovative effort that will test the
feasibility of providing taxpayers a new option to file their returns for free
directly with the I.R.S.,” Danny Werfel, the agency’s commissioner, said in a
recent statement.
This comes at a time when the IRS is embracing change. From recruiting
a new hoard of auditors, to employing
AI in the fight against fraud, the agency seems to be stepping into the
present, if not entirely embracing the future. For a federal agency, it seems
impressive.
Nearly 1 million Arizonans, mostly from working families, could be eligible to file their taxes online and for free with the IRS.
Here’s what you need to know about the IRS Direct File pilot program, coming this year to Arizona and 11 other states: https://t.co/GuZh2frpw9
— Groundwork Action (@GroundworkAct) January 2, 2024
Resistance from Some Sectors
However, a dissenting chorus rises from commercial tax-preparation
companies. Intuit, the brains behind tax software TurboTax, labels the direct filing project
as a “half-baked solution” and a misuse of taxpayer money. In the IRS
vs. commercial tax-prep company duel, battle lines are drawn, and the skirmish
for taxpayer allegiance commences.
Who’s In and What’s at Stake?
The direct file pilot will open its doors to low- and moderate-income
taxpayers with uncomplicated returns. Eligibility hinges on taking the standard
deduction, limited income, and no gig work. Despite initial resistance, the IRS
anticipates “several hundred thousand taxpayers” to join the limited
pilot. A clash of old and new, where tradition meets innovation, according
to reporting from the NYT.
Aiming for a Simple System
Participants can expect a mobile-friendly service, available in both
English and Spanish. With live online chat and customer service representatives
at their disposal, taxpayers can navigate the intricacies of filing with ease.
The IRS plans to promote this option through grassroots efforts and community
partners.
Piloting the Future: Small Steps, Big Impacts
According to the IRS, the initial offering will gradually expand and
they’re opening it to a select few taxpayers initially. With an eye on
perfection, the IRS plans to scale up its direct filing system as the season
progresses. The organization assures taxpayers that other free filing options
remain open, but the allure of a streamlined, IRS-guided process may just
redefine the future of tax filing.
These are times of change at the IRS, but they need to be. The use of
AI, the recruitment of new, ambitious auditors and the new online filing system
are all designed to help plug a massive
tax gap of $192 billion.
In a move that seems revolutionary, but really isn’t, the IRS is set to
launch a trial of its own free tax-filing system.
The Internal Revenue Service – the IRS – aims to redefine the filing
experience for residents in 12 states. However, this bold move is not without
its naysayers, as commercial tax-preparation companies brace against the winds
of change.
The IRS, known for its less than cuddly demeanor, is unveiling a
surprising twist to tax-filing. Residents in a dozen US states are about to
become part of a grand experiment, a direct filing system where federal tax
returns are submitted online to the IRS, and the best part? It’s free. “This is
a critical step forward for this innovative effort that will test the
feasibility of providing taxpayers a new option to file their returns for free
directly with the I.R.S.,” Danny Werfel, the agency’s commissioner, said in a
recent statement.
This comes at a time when the IRS is embracing change. From recruiting
a new hoard of auditors, to employing
AI in the fight against fraud, the agency seems to be stepping into the
present, if not entirely embracing the future. For a federal agency, it seems
impressive.
Nearly 1 million Arizonans, mostly from working families, could be eligible to file their taxes online and for free with the IRS.
Here’s what you need to know about the IRS Direct File pilot program, coming this year to Arizona and 11 other states: https://t.co/GuZh2frpw9
— Groundwork Action (@GroundworkAct) January 2, 2024
Resistance from Some Sectors
However, a dissenting chorus rises from commercial tax-preparation
companies. Intuit, the brains behind tax software TurboTax, labels the direct filing project
as a “half-baked solution” and a misuse of taxpayer money. In the IRS
vs. commercial tax-prep company duel, battle lines are drawn, and the skirmish
for taxpayer allegiance commences.
Who’s In and What’s at Stake?
The direct file pilot will open its doors to low- and moderate-income
taxpayers with uncomplicated returns. Eligibility hinges on taking the standard
deduction, limited income, and no gig work. Despite initial resistance, the IRS
anticipates “several hundred thousand taxpayers” to join the limited
pilot. A clash of old and new, where tradition meets innovation, according
to reporting from the NYT.
Aiming for a Simple System
Participants can expect a mobile-friendly service, available in both
English and Spanish. With live online chat and customer service representatives
at their disposal, taxpayers can navigate the intricacies of filing with ease.
The IRS plans to promote this option through grassroots efforts and community
partners.
Piloting the Future: Small Steps, Big Impacts
According to the IRS, the initial offering will gradually expand and
they’re opening it to a select few taxpayers initially. With an eye on
perfection, the IRS plans to scale up its direct filing system as the season
progresses. The organization assures taxpayers that other free filing options
remain open, but the allure of a streamlined, IRS-guided process may just
redefine the future of tax filing.
These are times of change at the IRS, but they need to be. The use of
AI, the recruitment of new, ambitious auditors and the new online filing system
are all designed to help plug a massive
tax gap of $192 billion.