Article Summary –
Wisconsin will join 12 other states in the IRS Direct File pilot program during the 2025 tax-filing period, allowing over 600,000 Wisconsin taxpayers to file their taxes directly with the IRS for free, an initiative supported by the Biden Administration’s Inflation Reduction Act. The Direct File system, which saved 140,000 users an estimated $5.6 million in its first year, has received high user satisfaction ratings and increased trust in the IRS. Despite opposition from Republicans and tax preparation companies, the IRS continues to modernize and improve customer service with the funding provided by the Act, while facing legislative efforts to reduce its budget.
The Treasury Department announced on Aug. 21 that Wisconsin will join the IRS Direct File system, enabling taxpayers to file income tax returns directly with the IRS at no cost.
Wisconsin joins 12 other states in the Direct File pilot program for the 2025 tax-filing period.
“Thanks to President Biden’s Inflation Reduction Act, over 600,000 Wisconsin taxpayers can file their taxes online for free with the IRS this Filing Season. Direct File will save Wisconsinites time and money and ensure they receive their due tax benefits,” Treasury Secretary Janet Yellen said in a statement.
The agency reported 140,000 taxpayers utilized the system in its first year, saving an estimated $5.6 million in filing fees.
“This will save hardworking people time and money. We look forward to seeing how Direct File and the new WisTax programs will serve Wisconsinites in 2025,” Wisconsin Gov. Tony Evers stated in the Treasury Department’s press release.
A report by the IRS in May showed 90% of users rated their Direct File experience as excellent or above average, and 86% said it increased their trust in the IRS.
President Joe Biden signed the Inflation Reduction Act in August 2022, funding the IRS for modernization efforts, including the Direct File system.
The legislation, opposed by congressional Republicans, passed with Democratic votes, including a tiebreaking vote by Vice President Kamala Harris.
Top Republicans, like Texas Sen. Ted Cruz and then-House Minority Leader Kevin McCarthy, falsely claimed IRS funding would target middle-class taxpayers. However, the IRS has used the funds to collect unpaid taxes from billionaires and corporations.
Republicans continue to pursue legislation to undo IRS reforms. IRS Commissioner Danny Werfel testified that full implementation of the Republican plan would hinder the agency’s ability to resolve historical issues and improve customer service. The Biden administration funded the IRS through 2025, but further funding requires congressional approval.
Tax preparation companies have opposed the Direct File system, as they profit millions from their services. According to OpenSecrets analysis in 2023, these companies have spent $90 million since 2003 lobbying against free tax filing programs.
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