ICYMI: Senator Carper Urges IRS to Support New Free Tax Filing Tool

In Case You Missed It, U.S. Senator Tom Carper (D-Del.) and Senator Elizabeth Warren (D-Mass.) sent a letter to IRS Commissioner Daniel Werfel and Deputy Treasury Secretary Adewale Adeyemo pushing the IRS to simplify the tax filing process and make the new IRS free file tool available to as many taxpayers as feasible in 2024.

The full text of the letter can be found by clicking here. Highlights in the news can be found below. Watch coverage from WRDE and read more in Reuters and Bloomberg.

WRDE (Salisbury, MD)

June 27, 2023

“The IRS is piloting a tool next year that could help you file your taxes for free. Senator Tom Carper’s office said he and 99 other Democratic lawmakers support the continued development of this tool to make taxes free and easy to file. Lawmakers say the average American spends eight hours and $140 every year to file their taxes. This tool aims to save Americans from spending that $140 And to help provide low income taxpayers the opportunity to claim thousands of dollars and benefits. The goal is for this tool to be available to as many taxpayers as possible in 2024.”

REUTERS: Democrats Sign Off on IRS Direct File as Fix to ‘Broken System’

June 28, 2023

A group of 99 Democratic lawmakers expressed their support of an in-development pilot program at the IRS to allow taxpayers to file their returns directly with the agency without the need of third-party preparation software.

Senators Elizabeth Warren of Massachusetts and Tom Carper of Delaware, as well as Representatives Brad Sherman and Katie Porter of California and Virginia’s Don Beyer, led a bicameral cohort of Democrats to give the IRS Direct File project their stamp of approval in a June 26 letter to IRS Commissioner Danny Werfel and Deputy Secretary Wally Adeyemo.

In May, the IRS delivered to Congress a report evaluating public interest and the viability of a free e-filing system created and operated in house at the agency. Given the report’s findings that Direct File could be popular with taxpayers and a potentially worthwhile investment of resources—especially using funds from the Inflation Reduction Act (PL 117-169)—the IRS announced that it plans to use the 2024 filing season as a trial run taxpayers can opt into.

BLOOMBERG: Open Free Filing Tool to More Taxpayers, Lawmakers Ask IRS

June 27, 2023

Lawmakers led by Sen. Elizabeth Warren and four other Democrats want IRS Commissioner Danny Werfel to make the agency’s free pilot electronic tax filing system available to more taxpayers next filing season.

“We urge you to make this pilot of the direct file tool available to as many taxpayers as is feasible,” the lawmakers wrote in a Monday letter to Werfel, “in order to deliver real value quickly to American taxpayers and demonstrate the value of modernizing the IRS, while also gathering data to make improvements and to better serve American taxpayers.”

The letter was signed by direct e-file champions Warren (Mass.) and Sen. Tom Carper (D-Del.), as well as Reps. Brad Sherman (D-Calif.), Katie Porter (D-Calif.), and Don Beyer (D-Va.). Dozens more Democrats added their names to the letter also addressed to Treasury Deputy Secretary Wally Adeyemo.

A May IRS report found high taxpayer interest in an IRS-run free electronic filing system but concluded that building and running the system would face big challenges and require more funding. Werfel announced the agency would launch a pilot for the 2024 filing season, but details are scarce on who would be eligible. Republicans and other critics, including tax preparation firms, contend last year’s tax-and-climate law provided $80 billion in supplemental funding and authorized the e-file pilot, but doesn’t allow for full implementation.

After this year’s congressional debt limit deal included a roughly 25% clawback of the $80 billion intended to help the IRS’ modernize and improve its services, free e-file gives the agency the chance “to show that it can meet and exceed its goals,” the lawmakers wrote.