The Internal Revenue Service (IRS) has announced intentions to conduct a pilot program that would let Americans submit their taxes directly to the IRS, according to recent announcements from President Joe Biden’s Treasury Department.
While this idea may initially seem beneficial, there are underlying concerns that make it a potentially problematic endeavor.
The proposal would entrust government bureaucrats with the responsibility of becoming tax preparers and filers, which could exacerbate taxpayers’ difficulties rather than alleviate them.
Additionally, the IRS and Treasury Department have initiated the program without the proper authority from elected representatives, raising questions about transparency and accountability.
The Direct File pilot program was set in motion by Deputy Treasury Secretary Wally Adeyemo, who instructed IRS Commissioner Daniel Werfel to pilot the program in the 2024 filing season.
However, it was revealed that the IRS had already developed a prototype system before receiving proper authorization.
The Treasury Department must approve all new programs undertaken by the IRS, but it remains unclear whether the IRS acted independently or if the Treasury Department collaborated with them from the outset.
Regardless, neither agency possesses the authority to greenlight such a wide-ranging initiative. Only Congress has the power to grant such authorization, and it has provided only limited permission to explore this idea.
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Controversies Surrounding the IRS Direct File Program
The Inflation Reduction Act allocated $15 million for the government to study the feasibility of Direct File.
The legislation stipulated that the IRS must notify Congress of the study’s results before developing a prototype.
However, the IRS neglected this obligation and proceeded to create its prototype system without releasing the mandated report.
This disregard for legislative requirements has understandably frustrated members of Congress, such as Senator Mike Crapo, who argue that the IRS is overstepping its bounds and acting without explicit legal authority.
The IRS’s reliance on the New America Foundation and a California professor to conduct the feasibility study raises concerns about the independence and objectivity of the research.
The New America Foundation had already advocated for a government-run tax filing option a year prior, while the professor publicly endorsed the idea before undertaking the study.
Predictably, the IRS-commissioned study produced favorable results for Direct File. However, a nonpartisan analysis conducted by MITRE Corporation, frequently hired by the government, contradicted these findings.
The MITRE analysis revealed that only 15 percent of respondents expressed interest in using a government-run filing program, citing concerns about the hassle it would entail and lack of trust in the government.
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Source: The Hill