Treasury Accuses GOP Of Siding With Tax Evaders In Direct Tax Filing Fight
The Treasury Department fired back Tuesday at House Republicans who want to defund the new IRS Direct Filing program, which will allow taxpayers to send their tax returns directly to the agency without using commercial software from companies like Intuit or H&R Block.
“House Republicans’ proposal would increase the deficit by allowing wealthy and corporate tax evaders to avoid paying taxes owed, while increasing costs for many American families by blocking a free IRS tax filing option funded by President Biden’s Inflation Reduction Act,” Treasury spokesman Haris Talwar said in a statement to HuffPost.
“This proposal sides with high-end tax evaders at the expense of the American people,” Talwar said.
House Republican appropriators released the draft text of their spending bill that includes the IRS on Tuesday. In it, they prohibited the use of any appropriated funding “to create a government-run tax preparation software that Congress has not authorized.”
The draft and Treasury’s response are the first salvos in a fight likely to drag on for months as lawmakers work on bills to fund the government starting on Oct. 1, the beginning of the new budget year.
While it’s unlikely anything more than temporary funding to get past the election will make it into law by then, the willingness of both sides to argue their cases so publicly underscores the stakes.
The IRS did a pilot demonstration program of Direct Filing in the recent spring filing season, allowing taxpayers from 12 states to use a government web site to enter their tax info and pay taxes or get refunds.
The Treasury Department used money from the Inflation Reduction Act passed in 2022 to pay for the program and anticipates using that pile again as it expands it next year by inviting all 50 states to participate.
But Republicans have said the program is not needed and requires a specific authorization from Congress.
“The IRS has proven itself time and again to be a poor steward of taxpayer information. This latest attempt to circumvent Congress and establish a new tax program only serves to further undermine the fraying trust between the agency and the public,” said Rep. Jason Smith (R-Mo.), chairman of the House Ways and Means Committee.
According to the Treasury, more than 140,000 tax filers used the pilot program, saving $5.6 million in tax prep fees and getting collective refunds worth more than $90 million.
