Despite a recent internal study showing that Americans overwhelmingly prefer commercial tax preparation software over an IRS-managed system, the Biden administration is continuing to push for the development of a direct e-file system for taxes.
The nonpartisan Mitre Corporation conducted the study earlier this year and found that only 15% of Americans would use an IRS direct e-file system even if it was able to prepare state returns and provided the same functionality as free commercial software.
House Ways and Means Committee Chairman Jason Smith, R-Mo., criticized the Biden IRS for not being transparent about MITRE’s independent findings, and for choosing a think tank with ties to the liberal wing of the Democrat party that has already advocated for this bureaucratic expansion.
The study also found that taxpayers prefer fast, easy, and free tax preparation, and will exchange cost over convenience, showing willingness to pay for commercial service when it comes to filing federal and state returns at the same time. Lack of trust in the government is a key reason for this preference. Established filers are also unlikely to leave current software since it contains historical information.
The only scenario where a direct e-file system would be preferred, according to the study, is for the minority of Americans who file complex returns. However, the cost of commercial software for complex returns is the main reason for the disparity between the two options.
In conclusion, the Biden administration’s continued push for an unpopular direct e-file system is misguided. The IRS needs to be transparent about independent findings, and taxpayers must have choices that work best for them when preparing their taxes.
The IRS must focus on building trust with taxpayers, rather than trying to gain more power through a direct e-file system.