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THE IRS free tax deposit program is in danger while the agency faces continuous cuts from the Trump administration.
After a limited Pilot launch In 2024, the program, known as Direct filemore than 30 million taxpayers In 25 states for the 2025 ranking season.
Funded under the Inflation reduction law In 2022, the program was strongly examined by the Republicans, who criticized the cost and participation rate. In the past year, republican legislators in the two chambers have introduced legislation to stop the IRS free deposit program.
Now some reports indicate a direct file could be at risk. Meanwhile, no decision has yet been made on the future of the program, according to an official of the White House administration.
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During Senate confirmation audience In January, the secretary of the Treasury, Scott Bessent, undertook to maintain the active direct file during the 2025 deposit season without commenting on the years to come.
“I will consult and study the program and understand it better and make sure it works to serve the three objectives of the IRS of collections, customer and privacy service,” said the Senate finance committee at the hearing.
However, the future of the free tax deposit program remains uncertain.
As of April 17, the Direct File website indicated that the program would be Open until October 15which is the deadline for taxpayers who have filed a Federal tax extension.
Many taxpayers can also deposit free of charge via another program called Free IRS filewhich is a public-private partnership between the IRS and the Free File Alliance, a non-profit coalition of tax software companies.
IRS in May 2024 Extend the free file program until 2029.
Mixed review of Direct IRS file
Direct file supporters Wednesday stuffed the possible decision to end the program.
“No one should have to pay huge costs just to deposit their taxes,” said Ron Wyden, D-ear. said in a press release Wednesday.
Wyden described the program as “massive success, allowing taxpayers to make millions of fees, save them time and reduce an unnecessary intermediary”.
In January, more than 130 Democrats, led by Sens. Elizabeth Warren, D-Mass., And Chris Coons, d-Del., Support expressed for the direct file.
However, opponents criticized the participation rate and the cost of the program.
During the 2024 driver, some 423,450 taxpayers created or connected to a direct file account. Approximately a third of these taxpayers, Approximately 141,000 declarantssubmitted a declaration via the direct file, according to a March report by the Inspector General of the Treasury for the Tax Administration.
These figures represent a launch of mid-season 2024 in 12 states for only simple yields. We do not know how many taxpayers have used the direct file until the deadline of April 15.
The cost of the direct file via the pilot was $ 24.6 millionThe IRS reported in May 2024. The operating costs of direct files were an additional $ 2.4 million, according to the agency.
