The IRS has introduced a new free electronic tax return filing system called Direct File, which aims to simplify the tax filing process for Americans. The program, currently in its pilot phase, was used by the first participant, a 37-year-old IRS employee from Texas, who completed her taxes in about an hour.
Direct File asks users simple questions about their tax status, provides definitions for tax terms, and offers a chatbot for assistance. The program is designed to be user-friendly and cost-effective, potentially saving taxpayers hundreds of dollars compared to commercial tax preparation services.
Currently available in 12 states, Direct File is open to eligible users to start their tax returns at any time. The IRS estimates that hundreds of thousands of lower-income taxpayers will participate in the program during the 2024 filing season.
While the program has received positive feedback for its simplicity and accessibility, it has faced criticism from private tax preparation companies. Critics argue that free tax prep services already exist and question the cost and necessity of developing Direct File.
The future of free electronic tax filing in the U.S. remains uncertain, with ongoing debates over funding and authorization for programs like Direct File. Proponents believe that offering more options for taxpayers to file their taxes is essential and could bring the U.S. closer to other countries with streamlined tax systems.
As the Direct File program continues to evolve, its success will depend on continued funding and support from policymakers. Users like the IRS employee from Texas hope to see the program expanded to benefit more Americans in the future.
