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Connecticut joins free IRS Direct File tax preparation system
Idaho

Connecticut joins free IRS Direct File tax preparation system

The Treasury Department and the IRS announced Friday that Connecticut is the latest state to join the IRS Direct File free tax filing program.

Last week, New Mexico also joined the squad after Oregon, New Jersey And Pennsylvania has also joined in recent weeks and months after 12 other states tested the solution last tax season.

“The Direct File tool will make it easier and more convenient for the average citizen to file their taxes, and it will help them save time and money by not having to purchase for-profit tax filing software,” Connecticut Governor Ned Lamont said in a statement. “We are grateful to the U.S. Department of Treasury and the Internal Revenue Service for making this resource possible, and we are excited that Connecticut residents will benefit from this service this upcoming tax filing season.”

The free online filing system was tested in 12 states last tax season, and the IRS announced plans in May to make the program permanent. All 50 states plus the District of Columbia were invited to join the program. The 12 states where it was available this tax season include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.

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Headquarters of the Internal Revenue Service in Washington, DC

Stefani Reynolds/Photographer: Stefani Reynolds/B

At least 290,000 people will be eligible to use the system in Connecticut. “Thanks to President Biden’s Inflation Reduction Act, more than 290,000 Connecticut taxpayers will be able to file their taxes online directly with the IRS for free this coming tax season,” Treasury Secretary Janet Yellen said in a statement. “Direct File will save Connecticut residents time and money and help ensure they receive the tax benefits they deserve. After a successful pilot this tax season, we are excited to expand the program into a permanent offering and welcome Connecticut as the latest new state to offer taxpayers this free option.”

However, the expansion of the program was criticized by a group of Republican senators led by ranking member of the Senate Finance Committee, Senator Mike Crapo (R-Idaho), and Finance Committee member Senator John Barrasso (R-Wyoming), who called for a letter last week to IRS Commissioner Danny Werfel.

“We write with serious concerns about your agency’s recent unilateral and unauthorized action to create a permanent Direct File tax preparation program for the Internal Revenue Service (IRS)… The American people do not want an all-encompassing IRS that functions simultaneously as tax collector, tax auditor, tax enforcer, and tax preparer,” the senators wrote. “Taxpayers already have access to numerous free tax filing options, and dozens of national nonprofit organizations offer free tax preparation services… The IRS does not have unlimited resources and should focus on improving information technology systems, data privacy, and long-standing customer service issues.”

They pointed out that fewer than 140,000 taxpayers used the program, far fewer than the expected 300,000 participants and even fewer than the potential users. Of the estimated 19 million taxpayers from 12 selected states, only 0.7 percent used the program, they stressed. They also said that the relevant provision in the Inflation Reduction Act only authorized a feasibility study, not the creation of a federal tax program.

For its part, the IRS said the pilot project exceeded expectations. In the five weeks that the program was generally available after extensive product testing, more than 140,000 Americans successfully filed their tax returns. On their federal returns alone, taxpayers were able to claim more than $90 million in refunds and save an estimated $5.6 million in tax preparation fees.

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