The American Coalition for Taxpayer Rights (ACTR) released the following statement highlighting the unnecessary and wasteful spending behind the IRS’s Direct File program, which could cost taxpayers an estimated $250 million despite existing free tax preparation options: “The federal government continues to waste taxpayer dollars on Direct File, an unnecessary, duplicative, and costly program that…
Just 140,800 filed their taxes with the IRS’s Direct File program this year, while private companies provided 8.5 million free returns in the 12 states where Direct File was available alone. Despite rhetoric claiming otherwise, Americans are not interested in having the government complete their taxes. Direct File remains an expensive and unnecessary program.
The IRS should stay out of the tax preparation business. Before explaining why, let me tell you how we got here.
In May, the IRS released a report on the feasibility of the IRS preparing and filing tax returns. The Democrat-passed, and misnamed, Inflation Reduction Act gave the IRS $15 million to have an “independent third-party” tell Congress whether the IRS should create its own tax preparation software, called a “direct file” program.
The American Coalition for Taxpayer Rights (ACTR) was formed in 2011 by the nation’s leading retail tax preparation and tax software companies and financial institutions, which collectively prepare and file more than 120 million of the 155 million federal tax returns annually. ACTR advocates for taxpayer rights and strengthens America’s voluntary tax compliance system.
