IRS to Test Free Tax Preparation Service in 2024

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Woman preparing taxes at home
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The IRS has announced it is “taking steps” to test a new free tax preparation and filing service in 2024.

Last year’s federal Inflation Reduction Act mandated that the IRS look into the feasibility of offering its own free, voluntary tax-filing service.

This week, the agency delivered a report to Congress about such a service, which would be similar to commercial tax-filing options such as TaxAct, TaxSlayer and TurboTax.

The report states that many taxpayers have expressed interest in an IRS-run tool that would allow them to both prepare and file their taxes.

The IRS also says it is capable of implementing such a program, often known as a “direct-file” service. However, the agency says such a tool would require “sustained budget investment and careful management of the potential program’s operational complexity.”

In a press release, Danny Werfel, IRS commissioner, says:

“The IRS is committed to delivering significantly improved services by providing taxpayers with tools, information and assistance to make it easier to comply with their tax filing obligations. Direct File — used by numerous tax jurisdictions around the world — has long been discussed as an option for improving the customer experience for taxpayers in the U.S.”

The U.S. Treasury Department has directed the IRS to gather more information about a direct-file service by implementing the pilot program for the 2024 tax-filing season, according to the IRS. The goal will be to further assess the requirements for sustaining such a service and to see whether the IRS can overcome some operational challenges that the report identified.

More details about the program will be released in coming months, according to the IRS.

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