IRS Program a Flop?

( – Confirming that one Democratic priority is just a wish-list item with no broader support, the IRS’s newest direct file online system attracted fewer-than-expected users with the 2024 tax deadline fast approaching.

At approximately 50,000 users, the agency fell short of its initial expectations of several hundred thousand users for this tax season.

This shaky start happened in just 12 pilot states and has sparked curiosity among tax experts who wondered about the timing and visibility of the program’s launch.

Former Treasury Department deputy director Janet Holtzblatt said she was surprised at the low engagement considering the massive number of taxpayers the IRS typically handles.

The program’s mid-season introduction and its newness might have left many taxpayers not knowing the plan was available despite the IRS’s efforts to promote it.

IRS Commissioner Danny Werfel highlighted that, for the first time, 19 million taxpayers can file their taxes online for free through this pilot program, even though it is currently available in states with a much larger total population.

The IRS has said it wants to gradually develop the direct file system to ensure a solid operational foundation before making it more functional and available.

Supporters of the program, like Igor Volsky of Groundwork Action, defend the system’s slow start, saying, “The IRS direct file program has turned the page on the tech meltdowns of the past by demonstrating that the government is capable of building a stable, user-friendly tax filing system.”

This approach comes at a time when electronic tax filing has been steadily increasing in popularity in the U.S. after the pandemic. The direct file system has limitations: it only works for standard wage income and does not work for contractors (like Uber and Lyft) that use forms like the IRS 1099-K.

Despite these shortcomings, experts like Leslie Book from Villanova University Law School praised the system for being easy to use and see it as a promising pilot that could be more widely used in the future.

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