The Tax Lobby Is Gunning for the End of Free Direct File

[Celerity]

Direct File lives, for now. Companies like Intuit and H&R Block — and Washington’s new Republican leadership — are looking for ways to gut the IRS program.

https://www.notus.org/money/turbotax-lobby-tax-prep-direct-file



The nation’s tax prep giants and Republican lawmakers are laser-focused on ensuring this is the last year the Internal Revenue Service offers free tax filing. The Internal Revenue Service’s Direct File is available in 25 states this tax season. But as the program has expanded its reach, it has simultaneously become the target of millions in lobbying dollars aimed at unravelling the federal government’s efforts to offer Americans a free way to directly file simple tax returns.

“We think [the IRS] ought to wind it down, and they ought to focus their attention on other key priorities like modernization,” said David Ransom, a tax lobbyist at Brownstein Hyatt Farber Schreck who represents the American Coalition for Taxpayer Rights, an alliance of tax prep companies including TurboTax owner Intuit and H&R Block.

Ransom called Direct File “unnecessary, costly and unauthorized,” three arguments echoed by critics of Direct File. Intuit and H&R Block currently dominate the consumer tax preparation market. Direct File could disrupt that dynamic by offering people a program to file their federal taxes for free directly with the Internal Revenue Service.

“It threatens the business model that some of the tax prep companies have taken, which is to see their product as near universal in application,” Vanessa Williamson, a senior fellow at the Brookings Institution and the Urban-Brookings Tax Policy Center, told NOTUS.

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