ICYMI: Sweeping Coverage Highlights Senator Carper’s Push to Simplify Tax Filing Process and Expand Access to Free Filing Options

In Case You Missed It, U.S. Senator Tom Carper (D-Del.) and Senator Elizabeth Warren’s (D-Mass.) letter to IRS Commissioner Daniel Werfel made headlines yesterday. The coverage highlights Senator Carper’s push to simplify the tax filing process and expand access to free e-filing options for taxpayers across the country.

The full text of the letter can be found by clicking here. Read more:

POLITICO MORNING TAX

By: Benjamin Guggenheim

— Senate Finance Committee members Tom Carper (D-Del.) and Elizabeth Warren (D-Mass.) are urging IRS Commissioner Danny Werfel to roll out a direct and free tax filing system run by the agency. […]

FREE FILE: A report commissioned by the Inflation Reduction Act on the feasibility of a free tax return filing system run by the IRS isn’t due until May, but Finance Committee members Carper and Warren are already urging IRS Commissioner Danny Werfel to be prepared if it concludes the program’s doable.

In a letter to be sent to Werfel on Tuesday obtained exclusively by Morning Tax, the Democratic tax writers laud the potential of such a system to cut costs for low-income taxpayers and improve the fairness of tax administration.

“We look forward to your report on direct e-filing in May,” the senators write. “If the report concludes that such a system is feasible, we urge you to roll it out as quickly as possible.”

Carper and Warren cite the fact that the Free File Program offered by the IRS in partnership with tax prep companies is used by a paltry 2 percent of taxpayers, despite the fact that 70 percent qualify.

The letter has 31 Democrats signed on so far. […]

BLOOMBERG TAX: Warren, Carper Ask IRS to Speed Agency-Run Online Filing Service

By Chris Cioffi

Sens. Tom Carper (D-Del.) and Elizabeth Warren (D-Mass.) called on IRS Commissioner Danny Werfel in a Tuesday letter to start readying a plan that expands access to free options for filing online tax returns.

The letter comes as an expert and think tank chosen by the IRS wrap up a study on the feasibility of creating a free online IRS tool for people to file their taxes. The agency was given $15 million as part of last year’s tax-and-climate law to evaluate whether a free direct e-file tax return system would be viable, though it said the study authors are not being paid.

“We look forward to your report on direct e-filing in May,” the letter said. “If the report concludes that such a system is feasible, we urge you to roll it out as quickly as possible.”

The letter was signed by over half of the Senate Democratic Caucus, including Senate Finance Committee Chairman Ron Wyden (D-Ore.).

Lawmakers pointed to Treasury data finding that Americans spend on-average $250 and 13 hours filing taxes, and the previous iterations to promote e-filing products have produced mixed results. They pointed to a National Taxpayer Advocate report that noted that just 2% of taxpayers used the IRS’s Free File partnership with tax-prep companies in 2022, a small fraction of the 70% eligible. […]

THE HILL: Senate Democrats press IRS on simplified filing, more free options

By: Olafimihan Oshin

A pair of Senate Democrats have urged the Internal Revenue Service (IRS) to take a simplified approach to the tax filing process and expand access to free e-filing options.

In a letter sent to IRS commissioner Daniel Werfel on Tuesday, Sens. Tom Carper (D-Del.) and Elizabeth Warren (D-Mass.) noted some ways the IRS can simplify its filing approach, including improving the taxpayer experience by using accessible e-filing tools.

“A key objective of the IRS should be to improve the taxpayer experience and make the process of filing income taxes simpler and more efficient. Better, more accessible e-filing tools can improve taxpayer compliance, minimize unintentional errors, and help taxpayers claim refunds quickly,” the senators wrote in their letter.

“As you know, the recent investments in the IRS under the Inflation Reduction Act present a unique opportunity to show how the agency can work better for the American people, and we strongly urge you to prioritize expanded access to simple, free e-filing options as part of this effort,” the letter continued.

The senators also expressed their concern with the Free File program, a program the IRS created in collaboration with private-sector tax preparation companies in an effort to simplify the tax preparation process and provide lower-income taxpayers the opportunity to file their returns for free while encouraging the growth of e-filing.

Carper and Warren wrote how the usage rate of the Free File program is relatively low, saying how taxpayers who are eligible for the program will instead either file tax returns using other options or not file returns at all.

“Despite Free File’s two decades of operation, millions of taxpayers annually still miss out on critical tax benefits like the Earned Income Tax Credit and Child Tax Credit because they do not file returns,” the letter reads. “This low utilization rate is deeply concerning, and suggests a lack of transparency and clear communication from tax preparation companies that participate in the program.” […]

The letter comes after the Senate Finance Committee held a meeting last week on the president’s fiscal 2024 IRS Budget and the IRS’s 2023 filing season. The senators noted the Inflation Reduction Act (IRA), where the IRS was commissioned to do a free direct e-filing tax return system.

The IRS was recently awarded $80 billion in funding from the IRA, which was passed last year.

“We are laser focused on finding ways to reduce barriers that taxpayers face when filing returns, including those among us who are members of the Senate Committee on Finance,” the senators concluded with their letter. “While the IRS has previously had limited success in addressing these challenges due to lack of resources, the investments in the agency included in the Inflation Reduction Act (IRA) — including dedicated funding to develop a roadmap for greater e-filing options — make it possible to reverse course and significantly improve the taxpayer experience.”

BLOOMBERG: H&R Block, Intuit Cut Bigger Checks to Lobbyists This Year

By Chris Cioffi

[…] Werfel, at the Senate Finance hearing, said the existing Free File partnership with tax preparation companies isn’t helping as many taxpayers as it should, but that no decisions have been made about whether the IRS would create its own e-filing system.

Finance members Sens. Tom Carper (D-Del.) and Elizabeth Warren (D-Mass.) called on Werfel in a Tuesday letter to start readying a plan that expands access to free options for filing online tax returns. In the letter, signed by over half of Senate Democrats, the lawmakers pointed to a National Taxpayer Advocate report that found just 2% of taxpayers used the IRS Free File partnership with tax-prep companies in 2022, a small fraction of the 70% who are eligible.

Intuit and H&R Block are no longer part of a consortium of tax-prep companies that offer free filing services through a partnership with the IRS.

NEWSMAX: Dems Push IRS to Fast-Track E-File System

By: Michael Katz

Democrat senators Elizabeth Warren of Massachusetts and Tom Carper of Delaware are urging the IRS to simplify the tax filing process and expand access to free e-filing options as it prepares to implement an operating plan to revitalize the tax collection agency.

“A key objective of the IRS should be to improve the taxpayer experience and make the process of filing income taxes simpler and more efficient,” read a letter signed by Warren, Carper, and […] other Democrat senators sent Tuesday to IRS Commissioner Daniel Werfel. “Better, more accessible e-filing tools can improve taxpayer compliance, minimize unintentional errors, and help taxpayers claim refunds quickly.

“As you know, the recent investments in the IRS under the Inflation Reduction Act present a unique opportunity to show how the agency can work better for the American people, and we strongly urge you to prioritize expanded access to simple, free e-filing options as part of this effort.”

The Inflation Reduction Act of 2022 gave $15 million to the IRS to study how Americans could file their taxes online through a federal website or program without cost. The agency must engage independent third parties to study new options for a free, online direct tax-filing system. […]

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