IRS gets $15M to find out if it can create online tax return system so Americans can file for free

Third party will weigh in on feasibility

(Patrick Semansky, Copyright 2021 The Associated Press. All rights reserved.)

The Inflation Reduction Act provided $15 million for the IRS to study how it could create a program that allows Americans to file their taxes for free.

The program would cut out the middlemen. The report must include third-party input and is due before Congress nine months after the Inflation Reduction Act became law.

The Inflation Reduction Act became law on Aug. 16, 2022. The $15 million is to study the cost of developing and running a free direct file tax return system, including costs to build and administer each release with a focus on multi-lingual and mobile-friend features.

The third party will look at the overall feasibility, approach, schedule, cost organizational design and IRS capacity to deliver a direct file tax return system.

The program, in theory, would replace the current free filing program. The free file program isn’t available to all taxpayers and isn’t widely used by eligible filers.

Filers who earn $73,000 or less can receive free guided tax preparation. The tax filing is done on an IRS partner site, but only some state preparation and filings are free.

Read: If you made $73K or less then you can file your federal taxes for free online


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Kayla is a Web Producer for ClickOnDetroit. Before she joined the team in 2018 she worked at WILX in Lansing as a digital producer.