Letter to the Editor: The Tax Solution That Wasn’t
Re “Just What We Needed, a More Annoying Tax Season,” by Binyamin Appelbaum (Opinion, April 5):
,
Mr. Appelbaum is right that the tax code is absurdly complicated. But the I.R.S.’s Direct File program wasn’t a meaningful solution.
The much-hyped experiment in government-run tax preparation proved that bad ideas can be both expensive and unpopular. The I.R.S. estimated that 32 million taxpayers were eligible to use Direct File during the 2025 filing season. Only 751,000 logged into the system. Fewer than 300,000 completed a return — less than half of 1 percent of individual income tax returns. Barely a rounding error.
It was also an expensive rounding error. Estimates put the processing cost — paid by the government using taxpayer money — at roughly $140 per filed return. That’s more per return than most taxpayers spend on the private-sector alternatives it was supposed to replace.
More important, Direct File posed a deep conflict of interest. It asked taxpayers to trust the I.R.S. to be their tax preparer, collector and enforcer. Taxpayers minimize their legal tax liability; the I.R.S. maximizes revenue collection, which it does through aggressive enforcement. In 2024, the I.R.S. lost 57 percent of the dollars it disputed in cases it brought against taxpayers. It is wrong more often than it’s right.
Software cannot solve a problem Congress created through dozens of deductions, credits, phase-outs and special eligibility rules. A government-run portal cannot be a substitute for simplifying the tax code.
Source: https://www.cato.org/commentary/letter-editor-tax-solution-wasnt
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