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Federal Tax

Treasury Holds Roundtable, Issues Fact Sheet on New E-Filing Tool

· 5 minute read

· 5 minute read

By Maureen Leddy, Checkpoint

The Treasury Department recently held a virtual roundtable discussion with taxpayers who used the IRS’ new Direct File tool to file their individual income tax returns free online directly with the IRS. Days later, the IRS issued a fact sheet on the e-filing tool. (Fact Sheet 2024-09)

At the roundtable, six taxpayers, including a college student, military veterans, and nonprofit and government employees, discussed their Direct File e-filing experiences with Treasury Deputy Secretary Wally Adeyemo and Chief Implementation Officer for the Inflation Reduction Act Laurel Blatchford on April 3. The e-filing tool was piloted last month for certain taxpayers in 12 states. The roundtable participants represented four of the pilot states: California, New York, Texas, and Washington.

The taxpayers generally reported a positive experience with the new e-filing tool. They found it “straightforward to use” and said they would recommend it to eligible friends and family members. They supported expansion of the pilot to additional tax situations in the next filing season.

The taxpayers felt confident using the e-filing tool to file directly with the IRS free of charge, knowing there would be no hidden fees or user up-sells later in the filing process. They also appreciated features that allowed them to get further information about “different tax situations, credits, and deductions.”

The taxpayers recommended that the IRS explore importing certain information already available to it to streamline filings. On April 9, an IRS spokesperson told Checkpoint that, “due to a recent change, Direct File users can import verification details–the previous year’s adjusted gross income or the prior year’s temporary pin-from–from the IRS, which could minimize a common error. The change was made based on feedback the IRS heard from taxpayers on what they wanted to see from Direct File.”

The fact sheet reminds taxpayers that Direct File is currently only available for individuals who lived in a pilot state in 2023 and are reporting Form W-2 income, Social Security benefits, unemployment compensation, or up to $1,500 in interest income on their federal tax return. Users can claim the Earned Income Tax Credit, Child Tax Credit, and Credit for Other Dependents. They cannot, however, itemize deductions and are limited to the standard deduction and deductions for student loan interest and educator expenses.

The fact sheet also clarifies that live representatives are available to support users daily between 7 am and 10 pm ET through April 17 in both English and Spanish. Support for resubmission or technical issues with timely submitted returns is available through April 20. According to an IRS spokesperson, “there is no phone customer service available.”

Direct File underwent a testing phase with thousands of taxpayers and was piloted on March 12. The Treasury Department estimates that 19 million taxpayers are eligible to use the e-filing tool in the current filing season.

Direct File is not without controversy, however, with 21 state treasurers, comptrollers, auditors, and other financial officers opposing the e-filing tool in a joint letter last month. The letter critiqued Direct File’s costs, absence of live help for users, and lack of a state-filing option.

 

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