NORFOLK, Va. — More than 100 lawmakers are pushing to expand the direct tax filing system on the state and federal levels.
U.S. Senator Tim Kaine (D, Virginia) joined colleagues in a letter to the Biden administration, the IRS, and Treasury Department. It asks them to make a recent pilot program permanent.
The IRS tried the Direct File project for the 2024 tax season on a limited basis in 12 states for people with very simple W-2s, the employee’s wage and tax statement. Data from that pilot shows it saved taxpayers $5.6 million in tax prep fees across the country.
"Some of the investments that we've made in earlier legislation has dramatically improved IRS customer service standards, reducing waiting times, etc," Kaine said. "But we should be doing everything we can to make tax filing and getting information to file your taxes as easy as possible."
Not all lawmakers have been supportive of the program. House Republicans’ fiscal year 2025 proposal out of the Financial Services and General Government Subcommittee in June proposes cuts to the IRS in 2025 and would cut funding to the Direct File program.
The IRS has also faced intense blowback to Direct File from private tax preparation companies that have made billions from charging people to use their software and have spent millions lobbying Congress. The average American typically spends about $140 preparing their returns each year.
If the program is made permanent, Republican Governor Glenn Youngkin would need to sign off to make it a reality for Virginians. The governor's office says it is looking into the legal and technological implications of the program.
The Associated Press contributed to this report.