Look Out Montana! IRS Will File Your Taxes for You???

That's the plan from the Biden Administration. The Direct File Pilot Program is a service from the Internal Revenue Service to prepare and file a simple federal income tax return for taxpayers.  This is not mandatory...yet; people can voluntarily sign up for Direct File.  Please note that this is just for federal income tax.  You would still have to file a state tax return as per usual.

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Well, our Attorney General Austin Knudsen jumped to our defense, leading a coalition of 13 AGs to oppose this federal overreach.  Their claim is that Congress, who has the Constitutional authority to make laws and appropriate funds, did not pass any legislation to permit or fund the IRS in this project.  Congress did commission a study on the overall logistics and feasibility of Direct File.  An IRS-chosen think tank approved the plan, but an independent organization determined that taxpayer interest was overestimated and the cost will balloon.

In a press release, Knudsen pointed out that low-income folks will be negatively impacted by this service.  I'm confused by this.  Low-income implies a simple return, from a job or benefits.  Direct File may be a quick, easy convenience.  And they should get their refunds sooner, right?

The release also mentions the damage to small businesses.  This would be true if Direct File is mandatory.  Businesses may be small, but they're not simple.  Any business should use a tax professional or CPA to prepare returns.

Now some of you may be in horror at the idea of the IRS preparing and filing your tax return for you.  But wait a minute, let's think about this.  The table would be turned, wouldn't it?  When I first saw this story, the question came right to mind:

Can we audit the IRS?

What a delicious idea.  If you think you paid too much in taxes, can you demand a meeting with the IRS agent or computer programmer who prepared your taxes and then go over any details in your return?  Can you set the date and time with the expectation that the IRS will show up?  And if the IRS is at fault, can you levy penalties and interest?

Heehee, turnaround is fair play.