Would you trust the Internal Revenue Service to calculate your taxes for you and then send you a tax bill?
Most New Hampshire Republicans give the idea a resounding “no,” according to a new poll released by a taxpayer rights organization. But that won’t stop New Hampshire from being one of 13 states participating in an IRS tax prep pilot project pushed through by the Biden administration.
How did the IRS become the tax preparer, collector, and auditor all in one? The Inflation Reduction Act — backed by all four members of the state’s federal delegation — included $15 million for the IRS to study the feasibility of a “Direct File” program. The Biden IRS asked the liberal New America think tank to issue a report, and IRS Commissioner Daniel Werfel assured Congress he would not act until after the report came in.
However, The Washington Post reports that the IRS already had a prototype for the program before the report was released. Senate Republicans say the agency is acting “without explicit legal authority.”
The pilot program begins next year.
Now, the Taxpayers Protection Alliance (TPA) has released a new survey showing New Hampshire GOP presidential primary voters overwhelmingly oppose the “Direct File” policy. The poll, conducted by Remington Research Group earlier this month, found just 10 percent of Granite State Republicans “strongly” or “somewhat” trust this system to “ensure you get all the credits and deductions you are owed,” compared to 83 percent who don’t.
Asked if Gov. Chris Sununu “should work with the federal government to allow the IRS greater access to Granite Staters’ tax information to utilize in this IRS-run tax preparation system,” 78 percent strongly disagreed.
The poll also found that 84 percent of GOP primary voters said they would unlikely support a presidential candidate who supported a government-run tax prep system.
“These results confirm what TPA has been saying since day one and what should be obvious by now: voters do not trust or want the IRS to act as both tax preparer and processor or have even greater access to their sensitive financial data,” said Taxpayers Protection Alliance’s (TPA) President David Williams. “Direct File is just another example of the IRS’ overreach into Americans’ lives.
“TPA calls on all GOP presidential candidates to denounce Direct File and pledge to end this misguided, wasteful use of taxpayer dollars and expansion of IRS power if elected,” Williams added.
However, the plan has strong support from progressives in Congress like Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.).
“Double woo-hoo! The IRS has announced its first-ever Direct File pilot program, an important first step towards creating a free, easy way for millions of Americans to file their taxes online,” Warren posted on social media.
Local Granite State conservatives are less enthusiastic.
“‘We’re from the government, and we’re here to do your taxes’ isn’t exactly in the Live-Free-Or-Die spirit,” said Andrew Cline, president of the Josiah Bartlett Center for Public Policy. “Simplifying the tax code so that regular Americans can understand it and file their own taxes without professional help is too much effort for Congress, I guess.”
And Grover Norquist of Americans for Tax Reform was even more blunt.
“The IRS’ doing your taxes’ for you would be the end of your privacy. If the IRS does your taxes, one of the 87,000 new IRS agents will have all your private info on his desk. And remember: The IRS has trouble with leaks,” Norquist said.
Progressives say the opposition to Direct File isn’t about concerns over the IRS’ troubled history of leaks or distrust of the government. Instead, they argue, large tax preparation companies oppose the move.
“I’m looking forward to supporting the IRS’ efforts to develop and expand this program, setting us on a path where Americans won’t have to worry about giant tax prep companies sharing their private data with Big Tech firms and ripping them off for services that should be free,” Warren said.
One of those companies, Intuit/TurboTax, pushed back.
“Direct File is not free tax preparation, but rather a thinly veiled scheme where billions of dollars of taxpayer money will be unnecessarily used to pay for something already completely free of charge today—free to the taxpayer and actually free for the government,” the company said in a statement. “In addition to now paying for ‘free’ tax preparation, Direct File is asking Americans to file their taxes directly with the IRS after the organization publicly acknowledged systemic inequities that see low-income filers and Black taxpayers targeted for audit at a higher rate than non-Black taxpayers. The Direct File scheme is a solution in search of a problem, and that half-baked solution now has the potential to become a financial nightmare for tens of millions of taxpayers.”
While New Hampshire is one of the pilot-project states, the concern about this expansion of government extends across the U.S., according to the TPA.
“TPA conducted a similar survey in 2022 that found 75 percent of voters nationwide do not support giving the IRS new authority to prepare and file tax returns on behalf of millions of taxpayers,” it said in a statement.