For way too long the IRS has been at the mercy of an agreement they made with Intuit and others when it comes to tax filing software in the US. The deal it struck was to allow companies to develop their own software but also prevent the IRS from doing the same. We all know how that turned out. Now, the IRS will roll out its own homegrown system beginning in January. This may finally bring an end to the complicated (and annoying) process of filing taxes. Jacob Bogage at the Washington Post has more.
The system will be available through a pilot program for a small group of taxpayers by January, when the 2024 filing season begins, said the people briefed on the matter, who spoke on the condition of anonymity to discuss internal agency conversations. It was developed by the IRS and the U.S. Digital Service, the White House’s technology consulting agency.
Last year’s Inflation Reduction Act, one of President Biden’s chief legislative victories, included $15 million for the IRS to look into creating a direct filing program.
“There’s something very important about the fact that even beyond making it easy and beyond making it free, this is something you could do directly with your government,” said Gabriel Zucker, associate policy director for tax benefits at the advocacy group Code for America, which has constructed its own tax filing prototype.
The IRS currently refers people seeking no-cost filing options to a consortium of companies that provide free e-filing for taxpayers below a certain income level. Though 70 percent of taxpayers qualify for those products, known collectively as IRS Free File, fewer than 3 percent of taxpayers use them, according to a Government Accountability Office report.Washington Post
One of the craziest parts of filing taxes in the US is the fact that the government already knows what you've earned and paid. Employers and other companies report everything directly to the IRS. Doing your taxes is essentially guessing what you owe or are due, then certifying you're right, and the government penalizing you if you're wrong.
My hope for whatever the new system is will simply be "This is what we have. Looks good?" and once you click "Yes" your taxes are done. If you need to correct an error it would be a simple fix and then you confirm. I won't hold my breath on that level of simplicity but hope springs eternal.