As the IRS is taking drastic steps to modernize many of the agency’s functions, a new report released on Oct. 2 indicates that taxpayer interest on a direct file system might be “overstated.”
According to the Treasury Inspector General for Tax Administration (TIGTA), a recent survey asking taxpayers’ opinions on such a filing system may be overstated “due to the design of the surveys conducted.”
“The Taxpayer Experience Survey did not provide a ‘neutral’ option for participants. Research shows that developing a survey with a five-point scale, to include a neutral option, rather than a four-point scale as used by the Taxpayers Experience Survey, is preferable because it does not put taxpayers into a ‘forced choice’ response scenario,” said TIGTA.
Moreover, the report indicates that taxpayers might believe that “the tool would have more options than it will immediately have available, such as the ability to file State tax returns.”
The survey in question found that 72 percent of respondents were either somewhat or very interested in the direct tool, with only 28 percent of those being very interested in the tool.
Currently, the IRS is piloting a direct file program that will focus on helping taxpayers file their taxes for the 2024 filing year, which will not include filings for state taxes.
The report also comes after the passage of the Inflation Reduction Act of 2022, which has appropriated a significant amount of funding for the agency’s functions and modernization efforts.
The report concluded with recommending to the acting chief transformation officer “that salaries and benefits of IRS employees who were participating in the Direct File Task Force were not being expensed against the $15 million IRA allocation,” stated TIGTA.
The agency agreed with the recommendation.
