On April 19 IRS commissioner Daniel Werfel testified to the Senate Finance Committee that no decision had been made on whether or not the IRS would offer a “direct file” system.
As shown in the video below, Ranking Member Sen. Mike Crapo asked Werfel:
“Has the IRS made the determination that it is going to pursue this?”
“Senator, no decision has been made on moving forward with direct file solution.”
But a Washington Post exclusive on Monday reported the IRS has already “quietly” developed a prototype system that it plans to roll out in 2024.
WaPo excerpt 1:
The Internal Revenue Service has quietly built its own prototype system to allow Americans to file tax returns digitally and free of charge, according to three current and former agency officials, essentially creating government software that could disrupt the tax-prep industry.
The system will be available through a pilot program for a small group of taxpayers by January, when the 2024 filing season begins, said the people briefed on the matter, who spoke on the condition of anonymity to discuss internal agency conversations. It was developed by the IRS and the U.S. Digital Service, the White House’s technology consulting agency.
WaPo excerpt 2:
IRS Commissioner Daniel Werfel had previously told lawmakers that the IRS would consult Congress after the think tank made its recommendation and had not yet determined whether to pursue its own software program. But if the IRS already has a prototype before the New America report has been released, “this suggests a pre-determined outcome and flies in the face of previous commitments Commissioner Werfel made to publicly consult Congress on a potential free-file solution, and for the IRS to not act without explicit legal authority,” said Sen. Mike Crapo (Idaho), the top Republican on the Senate Finance Committee.
Werfel also assured the House Ways and Committee that he’d wait until the Inflation Reduction Act-mandated study of the issue was released.
On April 27, Werfel told Ways and Means:
“Congress said study it and my understanding of the Congressional provision is what would it cost? What are the taxpayers’ opinions on it? And then an independent assessment of its feasibility and that’s what we’ll produce in mid-may and we’ll come and we’ll talk about it and you’ll have more grounding to ask me the tough questions.”