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Republican Members of Congress Question IRS Free E-File Study

S.J. Steinhardt
Published Date:
Mar 7, 2023

The IRS is working on a study about the feasibility of setting up a new, free e-filing system, but two leaders of the U.S. House of Representatives’ tax-writing committee objected to the parties chosen to carry out the study, Accounting Today reported.

In a letter to Acting Commissioner Douglas O’Donnell, Reps. Jason Smith (R-Mo.), chair of the Ways and Means Committee, and David Schweikert (R-Ariz.), chair of the Means Oversight Subcommittee, wrote that they had “serious doubts about the independence of these selections as they suggest the outcome of the study has been predetermined.”

As part of the Inflation Reduction Act, $15 million was allocated to the IRS to report on the cost of the agency’s developing and operating a free, direct e-file tax return system. “The legislation requires the report to include the opinions of an “independent third party on the overall feasibility, approach, schedule, cost, organization design, and Internal Revenue Service capacity to deliver such a direct efile tax return system,” the representatives wrote, casting doubt on the selection of New America and Loyola Law School Professor Ariel Jurow-Kleiman as the independent third parties.

“I have serious doubts about the independence of these selections as they suggest the outcome of the study has been predetermined,” the letter read, claiming that “New America is known to be a left-leaning think tank” and citing its study that favored the creation of “a modern, government-run tax filing option.”

While acknowledging that “Professor Jurow-Kleiman certainly has tax expertise, … [h]er recent work indicates a clear preference for an expansive government-run system which does not comport with the idea that she would be able to provide an unbiased, independent analysis.”

"I didn't join this effort with the intention of advancing any specific position," Jurow-Klieman told Accounting Today. "My only goal is to do my best to assess the feasibility and capacity of the IRS to offer a direct e-file tax system, as mandated by the Inflation Reduction Act."

Currently, the IRS offers a Free File Program for taxpayers whose adjusted gross income (AGI) is $73,000 or less. The program is a public-private partnership between the IRS and the tax preparer and filing software industry companies; these companies provide free online tax preparation and filing for taxpayers who qualify.

"Taxpayers have numerous options for preparing and filing their federal income taxes, including many free options," the congressmen wrote. "Taxpayers may prepare and file their own tax returns, use one of many tax preparation software companies, rely on a tax return preparer, or rely on” the IRS Free File Program.

They also expressed “general concerns over designating the IRS as both tax collector and tax preparer.”

They concluded their letter with requests for documents regarding the agency’s selection of New America and Jurow-Kleiman.

According to the Hill, the IRS is aiming to issue the study in May.

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