ICYMI: We’ll Take It From Here: Biden Makes Permanent IRS Program That Calculates Americans’ Taxes for Them; IRS Makes Free Tax Return Program Permanent and is Asking All States to Join in 2025

We’ll take it from here: Biden makes permanent IRS program that calculates Americans’ taxes for them:

The Biden administration on Thursday made permanent and expanded a program that gives the IRS the power to calculate the amount of taxes each participant owes to the federal government.

In October, the administration launched the IRS Direct File as a pilot program in 13 states. It allows users to have the IRS calculate their taxes for free.

President Biden and his Treasury Department touted the program as a way for Americans to save time and money by having the IRS do their taxes instead of paying a tax preparer service.

Critics, including 13 GOP attorneys general who organized to stop the program, say it’s an unlawful government-run tax service that is little used and mismanaged.

The program launched last year in Arizona, California, Massachusetts, New York, Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.

It allowed taxpayers with relatively simple returns to upload their information directly to the IRS for free. The IRS then calculated how much the participants owed and spit out a bill. Under the program, the IRS has the authority to veto deductions or credits up front.

Treasury Department officials hailed Direct File as a rousing success and plan to make it permanently available for the 2025 tax season in all 50 states and the District of Columbia.

The pilot program saw 140,000 participants claim more than $90 million in refunds and save an estimated $5.6 million in filing costs.

“The numbers speak for themselves: the Direct File Pilot was a success, saving American taxpayers countless hours and millions of dollars filing their taxes. Now, we’re bringing the program to a national audience. It’s just one more example of how President Biden’s Investing in America agenda is lowering costs for communities across the country,” said White House Deputy Chief of Staff Natalie Quillian. —>READ MORE HERE

IRS makes free tax return program permanent and is asking all states to join in 2025:

The IRS said Thursday it will make permanent the free electronic tax return filing system that it experimented with this year and is asking all 50 states and the District of Columbia to help taxpayers file their returns through the program in 2025.

The IRS tried the Direct File project for the 2024 tax season on a limited basis in 12 states for people with very simple W-2s, the employee’s wage and tax statement.

The agency also is inviting all states with a state income tax to sign up and help people file their state returns for free. During the 2024 pilot, tax agencies in Arizona, Massachusetts, California and New York helped people directly file their state taxes.

IRS Commissioner Danny Werfel said the IRS will report later this year on how many states plan to participate in the program in 2025.

The IRS was tasked with looking into how to create a “direct file” system as part of the money it received from the Inflation Reduction Act signed into law by President Joe Biden in 2022. It gave the IRS nine months and $15 million to report on how such a program would work.

“The IRS has been underfunded for decades, so taxpayers haven’t gotten the support they deserve,” Treasury Secretary Janet Yellen told reporters Thursday. “Thanks to the Inflation Reduction Act, we’re changing this.” The IRS is part of the Treasury Department.

Since the Direct File trial began in March, more than 140,000 taxpayers used it to file their tax returns, claiming more than $90 million in refunds, agency officials said.

Werfel said expanding the program will provide another filing option to taxpayers and “fits squarely into the IRS’ effort to make taxes as easy as possible for Americans, including saving time and money.” —>READ MORE HERE

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