Advocates call for free and easy IRS Direct File
Advocates for tax fairness this week delivered a petition – signed by more than 65,000 people – to the IRS in support of a free IRS Direct File option.
The petition signatures, which were delivered by Public Citizen, were collected by Public Citizen, the Coalition on Human Needs, Americans for Financial Reform, Americans for Tax Fairness Action Fund, Civic Shout, Daily Kos, Demand Progress, Democracy for America Advocacy Fund, Inequality Media Civic Action, Move On, Patriotic Millionaires, Progress America, Progressive Reform Network, Public Citizen, and Social Security Works.
Along with the petition delivery, advocates, many of whom make up the Coalition for Free and Fair Filing, held a briefing to push for the need for Direct File and to commemorate this week’s one year anniversary of passage of the Inflation Reduction Act (IRA) – which included needed resources for the IRS, offset by making the wealthy and corporations pay more of their fair share in taxes.
In addition to lowering prescription drug prices and investing in clean energy projects, the IRA provided an extra $80 billion to the IRS to improve customer service and increase tax fairness by enhancing the agency’s ability to pursue wealthy tax cheats.
The money has made a difference. Advocates say this year, 3 million additional calls have been answered due to increased IRS staffing, 140,000 more taxpayers have been assisted in person at 35 new Tax Assistance Centers, and the agency has achieved an 80 percent reduction in the backlog of unprocessed paper tax returns. In addition, in the past few months, the IRS collected $38 million in delinquent taxes from more than 175 high-income taxpayers.
“A year ago, we…fought hard to pass the Inflation Reduction Act, and we fought hard to give the IRS the resources it needs to track down wealthy tax cheats in the top 1% and at the same time, to adequately service the 99% of Americans who are just trying to honestly file their taxes and claim their refunds,” said Sen. Elizabeth Warren (D-MA). “So here we are a year later, and the IRS has made real progress.”
The Inflation Reduction Act authorized the IRS to launch a Direct File pilot project. But now advocates want Direct File to go universal, meaning any American would be able to file their taxes for free instead of having to pay for a service such as TurboTax or H&R Block for assistance. Advocates say taxpayers who access Direct File would save an average of more than $100 a year.
“Today Public Citizen delivered to the IRS more than 65,000 signatures from our activists and allies’ supporters, demanding a public option tax filing software so that profit-hungry corporations no longer serve as required middlemen for one of the most basic interactions between the American people and our government – paying taxes,” said Susan Harley, Managing Director of Public Citizen’s Congress Watch division. “We thank our partner organizations for joining with us to provide this opportunity for everyday people in America to stand up to Big Tax Prep.”
Advocates say Direct File not only would make things easier and save tax filers money – it would also address racial equity.
“A tax return means something to Black people, paying down debt, purchasing something that the family has needed for a year, and it offers breathing room,” said Brandon Tucker, Senior Director of Policy and Government Affairs at Color of Change. “The racial wealth divide is as real as the need for a free, direct file option. Our leaders must redouble their efforts and influence toward boosting economies, turning on the tap, and stopping the siphoning off of resources from our community.”
Both the IRS and the concept of free and easy Direct File have run into a buzz saw of opposition in Congress. House conservatives are trying hard to cut the agency’s funding – including the extra $80 billion it received through the IRA. And the tax prep industry is spending millions to protect its interests, including working to defeat Direct File.
“The industry has collectively spent nearly $40 million to make it harder for Americans to file their taxes and they are showing no signs of slowing down,” said Rep. Katie Porter (D-CA), according to PoliticoPro.
The Coalition on Human Needs and our allies continue to advocate for tax policies that focus on securing needed resources to invest in human needs – join us!