The IRS Wants To Do Your Taxes — And Make Sure You Pay More

The ongoing government shutdown has the IRS in zombie mode: walk-in Tax Assistance Centers closed, some refunds delayed, and about half the agency’s employees on furlough.

Like most bureaucracies, the IRS is constantly trying to accumulate more responsibilities and a larger budget. This shutdown, and the staffing cuts that have come with it, offers Congress — especially my former committee, the Ways and Means Committee — a unique opportunity to refocus the agency on its core mission. They should ensure the IRS becomes more focused on clearing its backlog of customer service requests by getting rid of unnecessary initiatives and side quests that the agency never should have initiated in the first place.

They should begin by abolishing the Direct File program, the program where the IRS “assists” taxpayers in preparing and electronically submitting their returns — effectively putting the collection agency into the role of tax preparer, a function traditionally left to the private sector.

They say death and taxes are inevitable, but at least your doctor isn’t on the Grim Reaper’s payroll. He has an incentive to keep you alive, just like tax preparers have an incentive to get you the biggest refund possible.

The IRS is trying to change that. During Joe Biden’s presidency, the agency launched a pilot program for a new “Direct File” service, which it describes as “a free, simple way to file taxes.”

The only problem? This “free service” would be run by the IRS, the same entity tasked with every interest in ensuring you pay the maximum amount of taxes to the government possible.

There are, of course, already several “free, simple” ways to file taxes, including private-public partnerships between tax software companies and the IRS’s Free File program.

The difference is that, under those agreements, a third party informs the taxpayer how much he or she owes the government.

The Direct File program exists because the IRS would rather be the one to tell you. It’s like letting a criminal chair his own parole board or asking a toddler what her bedtime should be.

TurboTax works hard to maximize your refund because they’ll lose business to H&R Block if they don’t (and vice versa). The federal government has no such incentive, only an insatiable appetite for our hard-earned money. Why would they put in extra effort to help us keep more of it?

They wouldn’t. And they didn’t. One report found that Direct File failed to list education tax credits for which hundreds of users would have been eligible, according to an inspector general report, costing them up to $2,500 each.

If “hundreds” sounds low, that’s because the pilot program wasn’t particularly popular. The IRS website proclaims that over 500,000 Americans used Direct File, but they seem to be citing the number of sign-ups. The cohort that actually filed their taxes through the new service appears to have been much smaller — around 140,000, according to that same IG report.

Direct File also greatly exceeded the pilot program’s $15 million budget, with per-filing costs nearly triple what the IRS estimated.

In short, Democrats’ latest scheme to empower the bureaucracy ticks all the same boxes as the bungled 2013 HealthCare.gov rollout. Doesn’t work? Check. Costs way too much? Check. Everyone hates it? Check.

But they aren’t giving up just yet. In a last-ditch attempt to save Direct File, Democrats snuck language into Trump’s Big Beautiful Bill requiring a feedback survey for the pilot program. Not a real survey, of course. That would’ve gone badly for them. This pseudo-survey makes no attempt to verify whether you’ve actually used Direct File and has no limits on how many times you can take it. A single bot could easily generate thousands of fake positive responses.

“Government programs, once launched, never disappear,” President Ronald Reagan once said. “Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”

Direct File hasn’t achieved immortality just yet, but we’ve seen enough to know just how disastrous that would be. Thousands or even millions of Americans would miss out on tax breaks to which they’re entitled. Meanwhile, the IRS budget would balloon to pay for new bureaucrats tasked with processing Direct File returns.

Republicans compromised earlier this year to get Trump’s tax cuts extended. Now, thanks to the ongoing shutdown standoff, they have a chance to drive a stake through its heart before it rises from the coffin.

GOP lawmakers should use their leverage to throw out the survey and shut down Direct File for good. If they don’t act soon, we’ll be stuck with it forever.

Renacci is an accountant and former Member of Congress from Ohio where he served on the Ways and Means Committee, including its Subcommittee on Tax Policy.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.