A government program made tax filing free and more efficient. Musk and DOGE may get rid of it anyway #CanadaFinance

Musk posted last month on his social media site that he had “deleted” 18F, a government agency that worked on technology projects such as the IRS’ Direct File program. This led to some confusion about whether Direct File is still available to taxpayers. However, conversations inside the IRS indicate that no decision has been made on whether to cut the program, two people familiar with these conversations tell the AP.

Former IRS Commissioner Daniel Werfel, who oversaw the rollout of the program, said Treasury officials considering the future of the program should take into account “the voice of the taxpayers.”

“My reflection is that taxpayers are in very different situations and have very different preferences for how they want to file,” he said. “Those whose preference is to file electronically direct with the IRS for free, it’s a good option to have on the menu. But it should not replace other options.”

Derrick Plummer, a spokesperson for Intuit, one of the country’s largest commercial tax preparation firms, said free tax preparation had been available for years before Direct File came along.

“IRS Direct File is a solution in search of a problem, a waste of taxpayer dollars and a drain on critical IRS resources,” he said. A June 2024 Treasury Inspector General for Tax Administration report estimates that the annual costs of Direct File may range from $64 million to $249 million.

“The IRS should focus on its core mission including data privacy and customer service while policymakers in Washington focus on simplifying the tax code,” Plummer said.

However, other taxpayers, like 31 year-old Aquiel Warner in Austin, Texas, say they want to avoid using commercial tax preparation software.

Warner filed her taxes with Direct File in 10 minutes using her phone and a chatbot that the IRS provides. She likes the program’s convenience, that it prepopulated her tax forms and that it allowed for free filing. Although she has some concerns about data privacy in the government — DOGE is reported to have access to some of the IRS’ internal systems — she feels more secure going through the IRS than commercial tax preparation services.

“I don’t want to be a product. I don’t want my information sold when I file my taxes,” she said. “I have to file my taxes, and I don’t want to be put in a situation where, in order to file my taxes, I have to pay to get the help I need because I’m not a professional tax preparer.”

Grover Norquist, president of Americans for Tax Reform, said the IRS never got explicit permission from Congress to create the Direct File system.

“It really doesn’t matter if it’s a good idea. It was done illegally,” he said, calling on Congress and the Justice Department to look into what he says is unauthorized spending that went into the creation of Direct File.

Democratic lawmakers in January asked Bessent and IRS commissioner nominee Billy Long to preserve the program. They wrote in a letter that “ending Direct File would hurt everyday Americans.” Long has not yet received a nomination hearing.

In the meantime, Musk and his cadre of computer programmers could decide to wield their tech skills to boost the program — or use the very same digital savvy to delete it.

For his part, Werfel hopes that the agency will keep the program. “It’s a big country with a lot of taxpayers with a lot of different preferences,” he said.

Francis, the Boston barista, hopes so, too.

”There are a lot of young people like me who are working and figuring out how to file their taxes — this just makes it faster and easier,” she said.

Fatima Hussein, The Associated Press