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John,
American taxpayers spend around 2 billion hours and more than $30 billion on tax preparation and fees each year.1 The burden on this falls disproportionately on low-income taxpayers who are then preyed upon by tax preparation companies who offer a “free” option, but often end up charging $200 or more.2
This is one of the main reasons the IRS has launched its successful Direct File program, offering taxpayers the opportunity to file their tax returns online for free directly with the IRS.
The IRS is opening the program to all 50 states―and the District of Columbia―next year and your governor has been invited to opt their state in, by allowing state taxes to be filed through the Direct File site or similar free tools. So of course tax preparation companies like TurboTax and H&R Block are trying to block it.
Since 1998, TurboTax alone has spent $44.5 million lobbying members of Congress, and in 2022 they spent $3.5 million―more than in any other year.3 And it’s paying off. Revenue for tax preparation companies has increased to $14.4 billion in 2023 alone.4
It is critical for states to opt in to the IRS Direct Filing system. Not only would it be more convenient for taxpayers, but by having to file state returns separately, it would force taxpayers to continue to go back to H&R Block, TurboTax, and others―paying exorbitant fees while risking having their financial data shared with outside corporations.
Send a message to your governor telling them you want IRS Direct File available to your state for the 2025 tax season.
Thank you for all you do,
Meredith Dodson
Senior Director of Public Policy, CHN Action
1 Everyday Americans would benefit from streamlined, reformed tax code
2 IRS Reforms Free File Program, Drops Agreement Not to Compete With TurboTax
3 TurboTax parent company Intuit is pouring more money than ever into lobbying amid push for free government-run tax filing
4 Tax Preparation Services Industry in the US - Market Research Report
-- DEBORAH'S EMAIL --
John,
Earlier this year, over 140,000 taxpayers across 12 pilot states used the IRS’s new, free, online tax filing system―Direct File―receiving more than $90 million in refunds and saving an estimated $5.6 million in tax preparation fees.1
The program was so successful that the IRS has announced it will become permanent and has invited governors in all 50 states to have their states participate. But there’s just one problem―there’s no guarantee that your governor will agree to partner with the IRS and allow people to file both state and federal taxes with Direct File next year and beyond.2
Participating in Direct File means taxpayers would have a free public option for online tax filing software for federal taxes and free tools for filing state taxes too. And it would mean that fewer people would be stuck paying exorbitant fees to tax preparation companies.
Send a direct message to your governor, telling them you want IRS Direct File to be available in your state in 2025.
SEND A MESSAGE
As part of the previous Free File program, 70% of U.S. taxpayers were eligible to file their taxes for free, but thanks to dirty tricks from TurboTax, H&R Block, and the rest, only 2-3% were actually able to utilize the free system.3
For years, tax preparation companies like TurboTax and H&R Block have used duplicitous means to mislead taxpayers, like hiding Free File from online search engines and creating their own “free” edition of their software that tricked consumers and often led them to pay as much as $200 in a single tax filing season.4 Last year it was revealed that TaxAct, H&R Block, TaxSlayer, and other online tax preparers were sharing taxpayers’ sensitive financial data with Google and Meta (the parent company of Facebook and Instagram)―in direct violation of taxpayer privacy laws.5
The more states that partner with IRS on Direct File, the more people will be able to bypass expensive tax preparation companies to file both their federal and state taxes.
Your governor needs to hear from you. Send a message now telling them that you want to be able to file your taxes online, for free in 2025 and beyond.
Thank you for all you do,
Deborah Weinstein
Executive Director, CHN Action
1 Warren, Carper, Beyer, Porter, Sherman Lead Over 130 Lawmakers Touting Direct File’s Successes, Urges Biden Administration to Expand Program, Make Permanent
2 IRS makes Direct File a permanent option to file federal tax returns; expanded access for more taxpayers planned for the 2025 filing season
3 Inflation Reduction Act Will Require the IRS to Study Free Tax Filing Options
4 IRS Reforms Free File Program, Drops Agreement Not to Compete With TurboTax
5 Attacks on Tax Privacy: How the Tax Prep Industry Enabled Meta to Harvest Millions of Taxpayers' Sensitive Data
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