Direct File Was A Direct IRS to Citibank

While a simplified federal income tax system is long overdue, the death of trusting Uncle Sam to do our tax returns … and give the old man direct access to our bank accounts … may have averted making a bad situation worse.

The WSJ editorial board made no bones about applauding the Treasury’s announcing it was ending “Direct File,” which was to be “bridge to [our] bank account”: Bad ideas do die in Washington now and then, at least for a while,” the editors opined. “The Treasury Department did the country a favor last week by canceling its experiment with government-run tax filing. The move will help preserve the vital practice of taxpayers managing their own returns.” Direct File, it might be recalled, was an IRS online platform that let filers prepare their taxes for free and submit them through the state. It was a Biden Administration brainstorm that launched in 12 states in February 2024 and expanded to 24 states (isn’t every government bad idea like Obamacare invariably expanded?) by this year.

As might have been expected from such a profound “reform” that was rolled out without much testing, the Treasury admitted to “serious problems” encountered. Cost was one. It actually cost taxpayers $138 for the IRS to process each Direct File return received, which is more than stinking Turbo Tax charges. Legal concerns naturally abounded since it finally dawned on people that millions of filers were “letting the IRS make both the first and final determination of their tax liability” … [drum roll] that was connected to their checking accounts. Enough said.

Davd Soul