The IRS will discontinue its Direct File program after a limited pilot and one full filing season, according to Commissioner Bill Long. This decision aligns with the policy directives within a large spending bill, which allocated resources to research and potentially replace direct e-file programs. Despite positive feedback from users, with 94% rating their experience as “excellent” or “above average,” the program is ending. The IRS is committed to modernizing its operations and will provide transparency regarding tax returns and audits.
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The Trump administration, backed by private tax-filing corporations, has officially shut down the IRS’s Direct File service, a free online tax-filing option. This decision comes despite positive reviews and a 94% satisfaction rate from users who saved an average of $160 annually on filing fees. The program was projected to save Americans billions annually and provide billions more in tax credits to low-income families. The move was influenced by months of lobbying from private tax-filing companies and GOP congresspeople who had received campaign donations from the tax preparation industry, leading to the program’s demise and financial gain for these companies.
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Despite Treasury Secretary Bessent’s initial commitment, the IRS Direct File program, a free online tax filing system, will be eliminated. The program, lauded for its ease of use and high user satisfaction rates, had successfully processed over 140,000 returns in its pilot year, saving taxpayers millions in filing fees. However, political opposition and the shutdown of the 18F development team contributed to its demise, leaving taxpayers to utilize alternative, potentially costly, filing methods in the future. The decision has drawn criticism for undermining public trust and access to essential government services.
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The Trump administration plans to eliminate the IRS’s Direct File program, a free electronic tax filing system, despite its ease of use and cost savings for taxpayers. Republican lawmakers and tax preparation companies criticized the program’s cost and effectiveness, while supporters argued its termination prevents taxpayers from accessing a vital free service and benefits large tax preparation companies. The program’s future was solidified when IRS staff were instructed to halt development, following earlier concerns about the program’s cost and low completion rate. This decision has been met with considerable opposition from various stakeholders.
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John Q. Hosedrinker