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 provides no meaningful benefit to the vast majority of Americans. Despite multiple free tax filing services already in place, estimates prepared for the IRS show that up to $250 million will be spent on this project—money that could have been better spent elsewhere.
To put this in perspective, $250 million could fund roughly 30.6 million dozen eggs, more than 13.6 million cheese pizzas, or nearly 46 million lattes—enough to caffeinate New York and Florida combined. It could also provide a $1,000 tax refund for nearly every resident of Winston-Salem, North Carolina, or pay for more than 154,000 tickets to Taylor Swift’s Eras Tour—if you could even find them. Simply put, taxpayers deserve better stewardship of their hard-earned money.
Private tax preparers already provide millions of free federal tax returns, with 25.8 million prepared at no cost last year alone. Another 2.9 million Americans received free returns through the Free File Alliance, a successful public-private partnership. Yet, despite these existing options, Direct File was used by just 140,803 taxpayers last year—making it a costly and inefficient use of federal resources.”
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 160 million federal tax returns annually. ACTR advocates for taxpayer rights and strengthens America’s voluntary tax compliance system.
