Latest news with #DirectFile
Newsweek
5 days ago
- Business
- Newsweek
IRS Change Proposed In Senate Finance Bill
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Republican Senators have proposed getting rid of two of the Internal Revenue Service's free tax filing programs, which allow millions of Americans to file their taxes free of charge. The Senate Committee on Finance has unveiled its amendments to the One Big Beautiful Bill Act, which was approved by the House of Representatives in May. It includes a proposal to "terminate" the IRS Direct File, as well as investigating whether that and the Free File program could be replaced. Why It Matters The Associated Press reported earlier this year that the Trump administration plans to end the Direct File program, which is only in its second year. In February, former Department of Government Efficiency head Elon Musk said he had "deleted" an arm of the General Services Administration, known as 18F, which helped build and run the program, as part of his sweeping cutbacks across federal agencies. What To Know IRS Direct File is available in 25 states and allows taxpayers with relatively simple tax returns to file without the need for a third party. According to the IRS, some 30 million taxpayers were eligible to use Direct File to file 2024 federal tax returns during the 2025 tax filing season. Stock image/file photo: Internal Revenue Service sign at the IRS Building in Washington, DC in March 2018. Stock image/file photo: Internal Revenue Service sign at the IRS Building in Washington, DC in March 2018. GETTY Free File helps taxpayers with adjusted gross income under $84,000 per year file federal income tax returns online using guided tax preparation software. The proposals include a provision that would direct the Treasury Department to "terminate the current Direct File program at the IRS," as well as "author a report evaluating the establishment of a public-private partnership between the IRS and private sector tax preparation services to offer free tax filing, potentially replacing both the existing Direct File and Free File programs." Direct File has only been running for two years and was piloted in 12 states in 2024 for the 2023 tax season. The IRS described the initial launch as a success, with 140,803 taxpayers using it in its inaugural year and more than 3.3 million taxpayers across all states using the eligibility checker. It was later expanded to 25 states for the 2024 season. No information is publicly available for how many used the service this year. Newsweek has contacted the IRS via email for the figures. Democrats have previously expressed concerns over ending the program. A letter signed by approximately 200 lawmakers was sent to Treasury Secretary Scott Bessent in April of this year, requesting that the program be extended for the 2025 tax year. While the program is designed to help lower tax preparation costs for Americans, it has attracted some criticism. In May 2024, Tania Mercado, spokesperson for TurboTax's parent company Intuit, told Newsweek that the program is "a solution in search of a problem and every American can already file their taxes for free, without any cost to the government or taxpayers." What People Are Saying Democratic lawmakers in their letter to Bessent: "Ending this free, easy-to-use, and popular program would be an insult to American taxpayers, eliminating an important alternative to commercial options provided by the tax prep industry." Mercado, speaking to Newsweek in February 2024: "Direct File is not free tax preparation, but rather a thinly veiled scheme where billions of taxpayer dollars will be unnecessarily used to pay for something already completely free of charge today." What Happens Next No date has been given for when the termination of Direct File could begin. The Senate is looking to pass its amendments on the bill by Independence Day—July 4—at which point it would return to the House for a final vote before being signed by the president.
Boston Globe
12-06-2025
- Business
- Boston Globe
Ex-congressman Billy Long confirmed as commissioner of the IRS, an agency he once sought to abolish
Advertisement Long will take over an IRS undergoing massive change, including layoffs and voluntary retirements of tens of thousands of workers and accusations that then-Trump adviser Elon Musk's Department of Government Efficiency mishandled sensitive taxpayer data. Unions and advocacy organizations have sued to block DOGE's access to the information. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up The IRS was one of the highest-profile agencies still without a Senate-confirmed leader. Before Long's confirmation, the IRS shuffled through four acting leaders, including one who resigned over a deal between the IRS and the Department of Homeland Security to share immigrants' tax data with Immigration and Customs Enforcement and another whose appointment led to a fight between Musk and Treasury Secretary Scott Bessent. After leaving Congress to mount an unsuccessful bid for the U.S. Senate, Long worked with a firm that distributed the pandemic-era employee retention tax credit. That tax credit program was eventually shut down after then-IRS Commissioner Daniel Werfel determined that it was fraudulent. Advertisement Democrats called for a criminal investigation into Long's connections to other alleged tax credit loopholes. The lawmakers allege that firms connected to Long duped investors into spending millions of dollars to purchase fake tax credits. Long appeared before the Senate Finance Committee last month and denied any wrongdoing related to his involvement in the tax credit scheme. Ahead of the confirmation vote, Democratic Sen. Ron Wyden of Oregon, the ranking member of the Senate Finance Committee, sent a letter to White House chief of staff Susie Wiles blasting the requisite FBI background check conducted on Long as a political appointee as inadequate. 'These issues were not adequately investigated,' Wyden wrote. 'In fact, the FBI's investigation, a process dictated by the White House, seemed designed to avoid substantively addressing any of these concerning public reports. It's almost as if the FBI is unable to read the newspaper.' Democratic lawmakers have also written to Long and his associated firms detailing concerns with what they call unusually timed contributions made to Long's defunct 2022 Senate campaign committee shortly after Trump nominated him. The IRS faces an uncertain future under Long. Tax experts have voiced concerns that the 2026 filing season could be hampered by the departure of so many tax collection workers. In April, The Associated Press reported that the IRS planned to cut as many as 20,000 staffers — up to 25% of the workforce. An IRS representative on Thursday confirmed the IRS had shed about that many workers but said the cuts amounted to approximately the same number of IRS jobs added under the Biden administration. Advertisement The fate of the Direct File program, the free electronic tax return filing system developed during President Joe Biden's Democratic administration, is also unclear. Republican lawmakers and commercial tax preparation companies had complained it was a waste of taxpayer money because free filing programs already exist, although they are hard to use. Long said during his confirmation hearing that it would be one of the first programs that come up for discussion if he were confirmed. Long is not the only Trump appointee to support dismantling an agency he was assigned to manage. Linda McMahon, the current education secretary, has repeatedly said she is trying to put herself out of a job by closing the federal department and transferring its work to the states. Rick Perry, Trump's energy secretary during his first term, called for abolishing the Energy Department during his bid for the 2012 GOP presidential nomination.
Yahoo
09-06-2025
- Business
- Yahoo
Fifteen years after shuttering its tax-prep app, Va. may be ready to compete with TurboTax again
A Resident Individual Income Tax Return form for Virginia residents. (Photo courtesy Virginia Tax) The Virginia Department of Taxation's website parts company with the web presences of other agencies in the commonwealth: It doesn't offer its own tools to help you complete your primary task there — taxes. While you can renew a car registration at the Department of Motor Vehicles site and register an LLC at the State Corporation Commission's site, Virginia Tax doesn't let you file your state income taxes online and instead points you to commercial tax-prep services. That's not because Virginia Tax hasn't developed its own filing app. It's because 15 years ago, the department shelved the iFile app that had already drawn more than 278,000 users in 2009. In 2010, then-Gov. Bob McDonnell, a Republican, signed a bill patroned by Del. Kathy Byron, R-Lynchburg, which had Virginia retire iFile and cede tax preparation to private providers that would offer apps for free to lower-income residents – the same proposition the Internal Revenue Service accepted in 2002. That removed a free option from higher-income taxpayers, with Intuit's market-leading TurboTax charging a state tax-prep fee that now stands at $64, despite the relative simplicity of the state's Form 760. Most other commercial tax-prep services charge for state filing, although Cash App Taxes does not. 'We should not have to pay a for-profit company in order to file our taxes easily,' Del. Kathy Tran, D-Fairfax, said after reviewing a constituent's complaints. But even taxpayers eligible to use Free File, historically around 70% of total users, have largely ignored it. In 2024, Virginia Tax processed 89,064 Free File individual returns – far fewer than the 4,128,006 total individual returns received electronically or the 446,782 filed on paper. Electronic returns cost 10 cents each to process and paper ones cost $5.96 each, Heather Cooper, Virginia Tax's director of communications and training, confirmed in an email. At the federal level, the IRS has downgraded from the Free File partnership. Pro Publica's coverage of how Intuit had made its Free File options hard to find online led to the IRS altering its Free File arrangement in 2019 to drop that deal's prohibition on competing with commercial tax-prep apps, and the IRS has now offered its Direct File app for two tax seasons in a row. Vanessa Williamson, senior fellow at the Urban-Brookings Tax Policy Center, called its popularity among users 'remarkable' — 74% of 440 respondents in a survey done after the 2023 tax-year filing season said they preferred it over other filing methods. 'The success of Direct File should be a model for the states,' she said. Virginia has not been among the 25 states supporting Direct File, but it may now be ready to reverse its own Free File decision — even as the Trump administration appears intent on scrapping Direct File. Two years after Tran introduced a bill to revive iFile that died in committee, the delegate sponsored a similar bill this year that would also have Virginia join Direct File. That one, with a companion measure sponsored by Sen. Jeremy McPike, D-Prince William, passed the General Assembly only to meet a veto from Republican Gov. Glenn Youngkin. Youngkin's veto message cited 'uncertainty' about Direct File's fate and also noted another recent advance towards returning Virginia to online filing: budgetary language requiring Virginia Tax's next revenue-management system to support 'an electronic filing system for individual income tax that can be used by all Virginians.' We should not have to pay a for-profit company in order to file our taxes easily. – Del. Kathy Tran, D-Fairfax Tran suggested that wording in the budget could be enough to accomplish her bill's goal, depending on how Virginia Tax interprets it. That interpretation could rely on who the next governor appoints to her cabinet, but the two presumptive candidates, former Democratic congresswoman Abigail Spanberger and Republican Lt. Gov. Winsome Earle Winsome-Sears, have not spoken out on this issue. A query to each campaign's press office went unanswered. Intuit questioned the need for a public tax-prep app. 'Free filing options for state tax preparation are already available today,' spokesperson Tania Mercado said. 'Filing federal and state taxes together and linking tax returns allows taxpayers to save time, ensure accuracy, improve privacy and data protection, and reduce the chances of tax refund fraud.' Opponents of direct filing also question whether public-sector developers would have the same motivations as private-sector counterparts. 'Additionally, the private sector would have an incentive to find as much savings as possible for taxpayers when preparing their taxes,' Americans for Tax Reform said in a 2010 statement commending Virginia joining Free File. Tran's reply: Nobody is banning commercial tax apps. 'Having a direct free file way for you to pay your taxes is not a requirement for you to use that option,' Tran said. 'That is a decision you as a taxpayer get to make.' In Maryland, the free iFile tax-prep app the state has offered since 2001 drew relatively few users this year: 39,717 returns out of more than 2.6 million submitted electronically, a little over half of the 76,918 paper returns handled as of early May, officials said. Almost 6,000 more returns came in via Maryland's Direct File portal using an interface developed by Code for America, Robyne McCullough, media relations director at the Maryland comptroller's office, said by email. When Maryland launched that partnership, officials estimated that almost 700,000 Marylanders would be eligible to use Direct File. But Maryland taxpayers have that choice, while Virginians do not. 'The thing preventing us from having a high-quality, free public tax preparation system is not technology or logistics, it's just politics,' said Williamson, the Urban-Brookings Tax Policy Center fellow.
Economic Times
05-06-2025
- Business
- Economic Times
The free filing IRS software TurboTax wanted to kill is now open source for all Americans
Why is Direct File under threat from Intuit and Donald Trump's new bill? What does it mean that the IRS open sourced Direct File's code? Live Events Who are the former IRS developers now shaping the future of tax filing? Why is the fight over free tax software such a big deal for Americans? What happens next for Direct File and taxpayers? FAQs: (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The IRS just made a major move to protect its free tax filing software—Direct File—by releasing most of its code publicly on GitHub. This decision comes at a crucial moment. As pressure mounts from Intuit, the maker of TurboTax, and political threats from Donald Trump's budget bill, the future of free, government-backed tax filing could be in real move to open source the code not only gives developers a peek into how the IRS built a modern, user-friendly filing tool—it's also a clear message: the work will live on, even if Washington politics try to shut it Direct File program, developed by teams from the US Digital Service (USDS) and 18F, was part of a pilot launched by the IRS in 2024. About 300,000 Americans used the tool, and according to Federal News Network, users gave it rave reviews for being free, fast, and simple. The idea was straightforward—make tax filing easy and accessible, directly through the not everyone is happy about this. Companies like Intuit, whose TurboTax software dominates the paid tax prep market, have lobbied heavily against Direct File. Now, Trump's budget reconciliation bill includes language that could shut down Direct File entirely. According to policy experts, ending the program 'is a gift to the tax-prep industry that will cost taxpayers time and money.'On GitHub, the IRS released much of the source code that powers Direct File. This is a big deal for transparency, accountability, and future development. It means anyone—from independent developers to watchdog groups—can now examine, improve, or even build upon the free move is especially significant because many believe the program is at risk of being dismantled for political reasons. By putting the code in the public domain, the IRS is essentially giving the project a second life—even if the federal government walks core developers of Direct File—Chris Given, Jen Thomas, and Merici Vinton—have left their government roles. They've now joined the Economic Security Project's 'Future of Tax Filing Fellowship,' an initiative dedicated to exploring better ways for Americans to file taxes without paying high not alone. Gabriel Zucker, who helped build Direct File while working at Code for America, is also joining the fellowship. Their goal? Find new, more efficient, and less expensive models of tax filing—keeping the spirit of Direct File alive in the private years, the IRS Free File program—offering no-cost filing options for low- and moderate-income Americans—has been plagued by private sector interference. Intuit and other companies have pushed hard to keep the government from creating a fully free and easy system, because it would directly threaten their like Direct File show that a simple, free tax filing solution can work. And not only that—it's popular. With over 300,000 users in its pilot year and overwhelmingly positive feedback, the public appetite for such a service is as corporate lobbying ramps up and Trump's bill threatens its existence, it's a reminder of how political power can override public benefit—unless the public speaks now, the fate of Direct File rests in the hands of Congress and policymakers. If the Trump-backed bill passes as written, the program could be killed despite its success. However, by releasing the code to the public and rallying around the cause of free tax tools, developers and citizens are making it harder to erase the program the fellowship led by Given, Thomas, Vinton, and Zucker is pushing forward. They're building something new—maybe even better—by applying the lessons learned from Direct short, this isn't just a tech story—it's a fight over who controls tax filing in America: the people or the a free IRS tax filing tool that helps Americans file their taxes easily without using paid services like it threatens their profits by offering a government-backed free tax filing option for the public.
Time of India
05-06-2025
- Business
- Time of India
The free filing IRS software TurboTax wanted to kill is now open source for all Americans
IRS Direct File software just took a bold step forward—its code is now open source on GitHub, even as the future of the free tax filing tool faces serious threats from TurboTax maker Intuit and Donald Trump's new budget bill. The program, used by over 300,000 Americans, received strong reviews for being fast, free, and user-friendly. Now, with developers leaving the government to continue this mission privately, the battle over free tax software heats up. This story reveals what's at stake, who's fighting for taxpayers, and why corporate lobbying wants it shut down. IRS Direct File open sourced as TurboTax and Trump bill threaten its future, pushing developers to launch a new private effort to save free tax filing tools for Americans. Explore how the IRS code release could reshape tax season ahead. Tired of too many ads? Remove Ads Why is Direct File under threat from Intuit and Donald Trump's new bill? What does it mean that the IRS open sourced Direct File's code? Tired of too many ads? Remove Ads Who are the former IRS developers now shaping the future of tax filing? Why is the fight over free tax software such a big deal for Americans? What happens next for Direct File and taxpayers? Tired of too many ads? Remove Ads FAQs: The IRS just made a major move to protect its free tax filing software—Direct File—by releasing most of its code publicly on GitHub. This decision comes at a crucial moment. As pressure mounts from Intuit, the maker of TurboTax, and political threats from Donald Trump's budget bill, the future of free, government-backed tax filing could be in real move to open source the code not only gives developers a peek into how the IRS built a modern, user-friendly filing tool—it's also a clear message: the work will live on, even if Washington politics try to shut it Direct File program, developed by teams from the US Digital Service (USDS) and 18F, was part of a pilot launched by the IRS in 2024. About 300,000 Americans used the tool, and according to Federal News Network, users gave it rave reviews for being free, fast, and simple. The idea was straightforward—make tax filing easy and accessible, directly through the not everyone is happy about this. Companies like Intuit, whose TurboTax software dominates the paid tax prep market, have lobbied heavily against Direct File. Now, Trump's budget reconciliation bill includes language that could shut down Direct File entirely. According to policy experts, ending the program 'is a gift to the tax-prep industry that will cost taxpayers time and money.'On GitHub, the IRS released much of the source code that powers Direct File. This is a big deal for transparency, accountability, and future development. It means anyone—from independent developers to watchdog groups—can now examine, improve, or even build upon the free move is especially significant because many believe the program is at risk of being dismantled for political reasons. By putting the code in the public domain, the IRS is essentially giving the project a second life—even if the federal government walks core developers of Direct File—Chris Given, Jen Thomas, and Merici Vinton—have left their government roles. They've now joined the Economic Security Project's 'Future of Tax Filing Fellowship,' an initiative dedicated to exploring better ways for Americans to file taxes without paying high not alone. Gabriel Zucker, who helped build Direct File while working at Code for America, is also joining the fellowship. Their goal? Find new, more efficient, and less expensive models of tax filing—keeping the spirit of Direct File alive in the private years, the IRS Free File program—offering no-cost filing options for low- and moderate-income Americans—has been plagued by private sector interference. Intuit and other companies have pushed hard to keep the government from creating a fully free and easy system, because it would directly threaten their like Direct File show that a simple, free tax filing solution can work. And not only that—it's popular. With over 300,000 users in its pilot year and overwhelmingly positive feedback, the public appetite for such a service is as corporate lobbying ramps up and Trump's bill threatens its existence, it's a reminder of how political power can override public benefit—unless the public speaks now, the fate of Direct File rests in the hands of Congress and policymakers. If the Trump-backed bill passes as written, the program could be killed despite its success. However, by releasing the code to the public and rallying around the cause of free tax tools, developers and citizens are making it harder to erase the program the fellowship led by Given, Thomas, Vinton, and Zucker is pushing forward. They're building something new—maybe even better—by applying the lessons learned from Direct short, this isn't just a tech story—it's a fight over who controls tax filing in America: the people or the a free IRS tax filing tool that helps Americans file their taxes easily without using paid services like it threatens their profits by offering a government-backed free tax filing option for the public.
