Over the last year and a half, the IRS has been building out the pilot program, which it characterizes as being “one more potential option” on the continuum from self-managed Free File, from commercial products like TurboTax to a tax prep professional. The program is more or less a direct result of funding provided by the 2022 Inflation Reduction Act, through which $15 million was earmarked for the purpose of exploring and implementing a simple, free, government-provided tax filing service. “This is a critical step forward for this innovative effort that will test the feasibility of providing taxpayers a new option to file their returns for free directly with the IRS,” said IRS Commissioner Danny Werfel in a press release announcing the news.
Direct File, as the service is called, is a shot across the bows of TurboTax, H&R Block and other paid tax prep services, whose owners have resisted free and simple tax filing for decades. The IRS will test a free tax filing service in 2024 for a subset of lucky taxpayers in as many as 13 states, the agency announced today.
