The IRS is piloting a new free electronic tax filing system called Direct File, and early users are raving about its ease of use.
Texan Dixie Warden, the first person to use the program, says it took her just an hour to complete her taxes, even though she considers herself mathematically challenged.
A Potential Game-Changer in Tax Filing for American
Direct File asks users simple questions, provides definitions for tax terms, and offers chatbot support.
The program is currently in a limited rollout in 12 states and is only available to filers with simple tax situations. However, the IRS estimates that hundreds of thousands of lower-income taxpayers will use it this year.
This cautious approach aims to avoid a repeat of the disastrous launch of the Affordable Care Act website.
Direct File has the potential to revolutionize how Americans file their taxes. Currently, many taxpayers pay private companies to prepare their returns, at an average cost of $140. Free tax prep services already exist, but participation is low. Direct File could offer a user-friendly alternative for millions.
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Controversy Surrounds New IRS Tax Filing Program
However, the program faces opposition from private tax preparation companies who fear it will hurt their business. Critics also argue that the IRS lacks the authority to create the program and that existing free-filing options are sufficient.
Proponents counter that the US tax system is complex and that other developed nations offer pre-populated tax forms to their citizens. Direct File, they say, is a step in the right direction towards a simpler and more efficient tax filing process.
The program’s future hinges on continued funding. While the Inflation Reduction Act allocated $80 billion to the IRS, House Republicans are attempting to reduce that amount. Only time will tell if Direct File will become a permanent and widely available option for American taxpayers.
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