The IRS has announced that it will be conducting a test of a free, electronic tax-filing system in early 2023. This limited rollout will take place in 13 states, with hundreds of thousands of taxpayers expected to participate. The goal of this new system is to help Americans save money, as they currently spend around $11 billion each year on tax-preparation services.
The first states to implement the IRS’ direct-filing platform include Arizona, California, Massachusetts, and New York. Additionally, residents in nine other states without income tax may also have the opportunity to participate in the pilot program. These states include Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.
The IRS program was established as a result of the Inflation Reduction Act passed last year, which allotted $80 billion in funding to the agency. The act required the IRS to explore the feasibility of offering a free tax-filing system.
IRS Commissioner Daniel Werfel explained that the system will be gradually rolled out to ensure ease of use for participants. He emphasized that the pilot program is aimed at providing taxpayers with another choice for filing their taxes. The IRS plans to collaborate with nonprofit groups, congressional offices, states, and other entities to identify eligible taxpayers based on their income, tax credits, and deductions.
This trial run is part of the IRS’s ongoing efforts to transform the agency and provide innovative services to taxpayers. Werfel stated that the goal is to make the system easy to understand and use for all participants.
—With reporting by the Associated Press.
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