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IRS to Test Free Tax-Filing Platform in 13 U.S. States

The IRS is set to trial a complimentary electronic tax-filing platform in 13 U.S. states early next year, with the expectation of hundreds of thousands of taxpayers participating in this initial phase. This initiative emerged from the desire to alleviate the financial burden on Americans who spend roughly $11 billion annually on tax-preparation services. The first states to experience this rollout include Arizona, California, Massachusetts, and New York, while residents of nine additional states without an income tax could also engage in the pilot. This program, initiated by last year's Inflation Reduction Act which allocated $80 billion to the IRS, aims to assess the viability of a free tax-filing system. The rollout will occur in expanding increments to ensure ease of understanding for the participants. While Intuit criticized the program, suggesting it overlooks existing free filing options, a government report indicated that the current Free File program is underutilized, with only 4% of eligible taxpayers availing it annually. The IRS, collaborating with various entities, aims to identify eligible participants for this pilot, viewing it as a step towards enhancing the IRS's service offering, presenting taxpayers with an alternative filing option.

Photo Credit: Scott Graham

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