For about a year now, the Internal Revenue Service has been deciding on whether or not it wants to build a free tax filing system. Additionally, the agency plans to launch a pilot program of the system that will be available to a select number of taxpayers for the upcoming filing season in 2024.
Overview
Under the Inflation Reduction Act, the IRS has a lot more money to work with. This has allowed the agency to allocate roughly $15 million toward funding a task force and begin conducting studies for a free tax filing program.
IRS Survey
Part of the IRS’ studies included conducting a survey. The survey found that roughly 70% of taxpayers showed interest in the free filing program known as Direct File. Studies also found that the free service would cost approximately $250 million annually, but this can vary greatly depending on who is allowed and will want to use the service.
Commissioner Statement
During a press conference IRS commissioner Daniel Werfel said, “The report shows that a majority of taxpayers are interested in using an IRS-provided tool to prepare and file their taxes. It also shows that the IRS is technically capable of delivering Direct File, but that doing so would require additional resources and add complexity to IRS operations.”
Wrap Up
As of now, it is unknown who will be eligible for the pilot program in 2024. However, the IRS has suggested it may be limited to those with a certain income threshold or undergoing certain tax situations.