The former Treasury secretary under the Reagan administration warned that Americans should remain “skeptical” about Internal Revenue Service (IRS) proposals, including a pilot program that would allow taxpayers to file their taxes directly with the federal agency, rather than using a service like TurboTax or H&R Block.
The reason why, she explained, is that Americans likely believe that the IRS, which is an agency that specializes in collecting tax revenue, will try “to keep their tax liability as high as possible, unlike a market service, whose incentive is to look for ways to save taxpayers money.” Meanwhile, the former secretary suggested that the agency and other federal agencies are sluggish, bureaucratic, and not known “for its effectiveness in operating technology.”
“As a former U.S. treasurer, I understand the problems with our country’s tax system. Everyone would like a system that makes filing taxes easier and ensures that government efficiently collects what’s owed. But the Direct File program is not the solution to these problems,” Buchanan said.
The Direct File proposal came as part of the $80 billion infusion of money for the tax agency over the next 10 years under the Democrat-backed Inflation Reduction Act, which President Joe Biden signed last summer. It gave the IRS nine months and $15 million to report on how it might implement such a program and how much it would cost.
Robert Marvin, an IRS spokesperson, told The Associated Press earlier this year that the key goal of the study is to “look for ways to make filing taxes as easy as possible.” “It’s important that Americans have choices that work best for them when preparing their taxes, whether it’s by using a tax professional, tax software or free options,” he said.
But big tax preparation companies have millions of dollars to lose if the program comes to fruition. Last year, more than 60 million taxpayers were serviced between Intuit, the parent company of TurboTax, and H&R Block.
An AP report this year found that tens of millions of dollars have been spent trying to influence policymakers on the issue. Lobbying data shows that the big tax companies such as H&R Block and TurboTax, in particular, have spent heavily.
An analysis shows that Intuit, H&R Block, and other private companies and advocacy groups for large tax preparation businesses, as well as proponents in favor of electronic free file, have reported spending $39.3 million since 2006 to lobby on “free-file” and other matters. Federal law doesn’t require domestic lobbyists to itemize expenses by specific issue, so the sums are not limited to free-file, AP reported.
But Derrick Plummer, a spokesman for Intuit—the firm that owns TurboTax—told AP that taxpayers can already file their taxes for free and there are online free-file programs available to some people. Individuals of all income levels can submit their returns for free via the mail.
A “direct-to-IRS e-file system is a solution in search of a problem, and that solution will unnecessarily cost taxpayers billions of dollars,” he warned. “We will continue unapologetically advocating for American taxpayers and against a direct-to-IRS e-file system because it’s a bad idea.”
Buchanan, the sister of former presidential candidate Pat Buchanan, noted that the IRS hired the New America Foundation, a center-left think tank, that came up with the idea to produce a government-run tax filing option.
“The New America Foundation’s findings flew in the face of a nonpartisan analysis conducted by MITRE Corporation, a non-profit frequently hired by the government, which made it clear that the American public lacks demand for Direct File,” she wrote, cautioning that “only 15 percent said they would use such a program, with most finding that the IRS option would be far more of a hassle than tax preparation service alternatives on the market.”
The reason why people won’t use the option, a study said, is due to a “lack of trust in the government.”
The Epoch Times has contacted the IRS for comment.
