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United States

IRS To Begin Trial of Its Own Free Tax-Filing System (nytimes.com) 96

The Internal Revenue Service is rolling out a free option for filing federal tax returns this year to some residents of a dozen states. From a report: Last month, the agency published details of its plan to test an in-house filing system, in which taxpayers submit their federal tax returns directly to the agency online at no cost. Residents of 12 states are eligible to participate if they meet certain criteria. "This is a critical step forward for this innovative effort that will test the feasibility of providing taxpayers a new option to file their returns for free directly with the I.R.S.," Danny Werfel, the agency's commissioner, said in a recent statement.

While the direct filing system is starting on a limited basis, it has already faced some resistance, particularly from commercial tax-preparation companies. A spokeswoman for Intuit, Tania Mercado, criticized the direct file project as a "half-baked solution" and a waste of taxpayer money. "The direct file scheme is a solution in search of a problem," she said. Intuit makes the TurboTax tax preparation software. Democrats in Congress generally support the idea of free, direct filing, while Republicans contend that the idea, part of President Biden's plan to overhaul the I.R.S., would give the agency even more power over ordinary taxpayers.
US lawmakers said earlier this month that federal tax credits that Intuit received could have been better spent to build a free government alternative to Intuit's popular online tax preparation software TurboTax. The IRS estimates it would cost $64 million to $249 million annually for the agency to run a free-filing program. In the fiscal year ending in July 2023, Mountain View, California-based Intuit received $106 million in federal research and experimentation credits, which amounted to about 4% of its total R&D expenses, according to a regulatory filing.
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IRS To Begin Trial of Its Own Free Tax-Filing System

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  • Just send a receipt and offer a voluntary re-file if the taxpayer thinks taxes were imposed incorrectly. Some 90% or more won't bother to re-file, reducing the IRS burden a lot.
  • For the majority of tax payers with a simple filing, this cuts down massively on adm costs.

    Also, what do you get if you concatenate the irs?

  • by Anubis IV ( 1279820 ) on Monday January 08, 2024 @09:44AM (#64140649)

    States: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming

    And then from the article:

    The direct file pilot will be open to low- and moderate-income taxpayers with simple returns. To be eligible, for instance, filers must take the standard deduction and have income limited to wages reported on Form W-2, Social Security or unemployment as well as interest income of $1,500 or less. Gig workers aren’t eligible. [...]

    In online summaries, the agency has said that to make sure the pilot works well, it will initially be opened to “a small group of taxpayers” during the 2024 filing season. As the season progresses, “more and more” eligible taxpayers will be able to use the service.

    Additionally, it sounds like some states that have their own income tax will have (in time for this tax season) the ability to pull data from the federal filing to pre-fill your state forms after answering a few questions, saving you even more time.

  • Gentlemen WTF is the article talking about. Even when I owned a small business I submitted my IRS tax-forms without cost. Free ? Free instructions ! Free what ? IRS does not charge a penny to have you send them money ! Sure I sat down every quarter to calculate this-and-that tax and the yearly forms were certainly a PITA. But more than middle-school maths not needed. OKey mebby I wrote a few BASH-scripts to preview this-or-that, but really .. pay somebody to do my taxes ? Insane.
    • Exactly this. I've never used a tax preparer and file biz and personal taxes. It just is not that complicated. Certainly not for nerds. I've a friend who always uses a service or TT and his taxes are trivial to do. But as trivial as they are, he moved awhile back and changed jobs. The unqualified preparer told him he could take moving expenses. I said wait, was the new job 50 miles from the old? Nope, you can't take the deduction I told him. The IRS denied his moving expenses for exactly that reason and he
  • by XanC ( 644172 ) on Monday January 08, 2024 @10:27AM (#64140839)

    This has existed for many years, it's called Free File Fillable Forms [irs.gov]. The IRS makes it available, you fill in your information, you e-file. How is this different?

    • Re: (Score:3, Informative)

      by Anonymous Coward
      Free File Fillable Forms is not actually run by the IRS. But also I'm guessing this is more the "tax wizard" style of most tax software that leads you through the steps and doesn't make you re-enter numbers for no good reason. (I use Free File Fillable Forms every year; it's not that bad, but it's definitely more annoying and obtuse than it has to be.)
    • by Average ( 648 )

      Came to say, I've used Free File Fillable Forms for years and years now. But then again, I sorta find doing my own taxes fun (not enough to want to make a living of it for others though!). At least two years where I've discovered some edge case they weren't handling and whoever was responding to their e-mail was appreciative and got fixed within days. But, oh yeah, it's for the nerds! When you get a 'rejected' and the help is an XPath address to an XML validation error... well, it helps to have been a

  • Deciding how to spend taxpayer money is a complex question. This is why we need responsible leadership.

  • by Computershack ( 1143409 ) on Monday January 08, 2024 @11:00AM (#64140973)
    Nice to see the USA finally catching up. We've been able to do this in the UK for well over a decade and a half direct through HMRC's own website, it'll calculate what you owe and you can pay or request refunds too.
    • Re: (Score:2, Troll)

      by rsilvergun ( 571051 )
      What did Churchill say about us? Something like you can always count on Americans to do the right thing after they've tried everything else.
  • Fucking parasites.
  • Fuck Intuit, those bait n' switching mutherfuckers!

  • The IRS already has all of your W2s and all transactions for the past year of over $10,000.

    They could ask for the social security numbers of your dependents and then fill everything out for you to review.

    In this early version, your options could be either clicking the file button or rejecting and filing the traditional way.

    Millions could file their taxes in under a minute

  • by Archangel_Azazel ( 707030 ) on Monday January 08, 2024 @12:50PM (#64141339) Homepage Journal

    A spokeswoman for Intuit, Tania Mercado, criticized the direct file project as a "half-baked solution" and a waste of taxpayer money.

    Sorry, what? The company that deliberately hid its online offering whole being paid to offer it? The company known for the insanely convoluted and confusing way you had to get to said free offering?
    I think the waste of money is in having tax code needlessly complex so you can stick in a bunch of carve outs for your friends. It could be simple, but given we have the ultra- wealthy writing our laws I'm pretty sure it's only is those "unsolvable mysteries " like providing competitive broadband internet.

    #RecycleCongress

  • Presumably, this service occurs over the internet using a browser, creating a plethora of pitfalls. Unless they give me a program I can run locally that once finished files the return securely through its own socket, no thanks.

  • In the UK, this has been possible for years. you can file your return either on paper or on a Government websites, which is reasonably user friendly and does all the calculations for you. this is not suitable if your circumstances are more complex, but perfectly fine for most people.
  • I'm part of the Intuit=Theft crowd. Anything that takes money away from Intuit gets my vote.

  • THAT would make it fantastic for the vast majority of simple e-filers. The IRS already has the data. Why can't they fill in the form for you and let you just confirm and pay (or apply for a refund)?

  • ... even more power over ordinary taxpayers.

    Yes, it's far better that corporations hold that power over tax-payers: Intuit/TurboTax has shown us how that ends. While the US government must be fascist because it's 'not allowed' to own anything, history and current practice shows the US government is the servant, not the master, in these business deals.

  • if $106 million is 4% of their R&D, that means Intuit is spending over $2 billion on R&D. WTH are they researching? It's a software company isn't it?
  • Of COURSE they don't want the government to destroy their scummy business model.

I'd rather just believe that it's done by little elves running around.

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