ON THE TO-DO LIST: Those comments laid out a number of ways to potentially better the Direct File product — perhaps most particularly, that the portal automatically enter a user’s tax form, as is available on private-sector competitors like Intuit’s TurboTax. Some users also complained that Direct File would crash, causing them to lose time and progress; that their refunds were lower than in previous years using other preparers; that the chat option was faulty; and that the program didn’t work well on certain internet browsers. That’s on top of other criticisms of the program that have been lobbed by groups tied to private-sector preparers, including that average refunds were lower on Direct File and that less than 1 percent of eligible taxpayers actually submitted a return through the portal. Also worth noting: The IRS acknowledged some of the concerns laid out by the conservative group in the agency’s own analysis published after the pilot program. That report noted that some users wanted clearer explanations from Direct File for their personal tax situations and the pre-population of tax forms. Some Democratic lawmakers also want the IRS to stop using an outside company, ID.me, to verify Direct File users, something else that came up in the newly released comments. David Williams, the president of the Taxpayers Protection Alliance, said that he hoped the findings would help Republicans interested in taking a deeper look at the program — though he also acknowledged there was little the IRS could do to convince him that Direct File was a worthwhile endeavor. "Maybe there needs to be more serious evaluation of the program, whether it's really working and whether it's really needed," Williams told Weekly Tax, later adding: "Why is there such a rush? And I think the rush is to get it ensconced into the IRS before it's taken away." Weekly Tax reached out to the IRS about the Taxpayers Protection Alliance’s findings, but didn’t receive an official comment. It hasn’t even been two weeks since Election Day, so it’s probably way too soon to know how much of a priority it will be for Republicans to target Direct File next year. Certainly, key lawmakers on tax issues will be preoccupied with finding a solution to all the temporary parts of the Trump tax cuts that are set to expire at the end of next year. The easiest way for Republicans to undercut Direct File would likely be through the appropriations process. But with the GOP’s narrow majorities, particularly in the House, they’ll need help from Democrats to keep the government funded next year — and that means they won’t get everything they want in spending deals. Something else to consider: Any GOP action against Direct File would almost certainly commence after the IRS begins accepting tax returns in January. That likely would give the program a second chance to make a good impression, this time on a larger group of taxpayers. Direct File’s supporters believe that another successful filing season will help the program gain a greater toehold, and make it harder for opponents to unlodge. And let’s be honest: It might not be 90 percent, but a 70 percent approval rating for a new government program is still pretty solid. Direct File’s proponents argue that the program isn’t a particularly partisan issue among users, even if it might be in political circles. Adam Ruben of the Economic Security Project noted that voters for both former President Donald Trump and President Joe Biden in 2020 overwhelmingly preferred Direct File to other preparation options, according to his group’s research. Ruben also pointed out that lots of the people who will be eligible to use Direct File next year will live in states carried by Trump this year — including the swing states of Arizona, Nevada, North Carolina, Pennsylvania and Wisconsin, not to mention large red states like Florida and Texas. “This is good government at work,” Ruben told Weekly Tax. “And if this administration wants government efficiency, it’s hard to think of a good reason for them to mothball a proven, popular program like Direct File.” LAYING DOWN A MARKER: House Speaker Mike Johnson made the rounds on the Sunday shows over the weekend, shortly after joining President-elect Trump at an Ultimate Fighting Championship event. Johnson emphasized that Republicans are going to try to strike swiftly on a tax bill next year. “We have to make sure early in this new Congress that we make certain the American people don't experience the highest tax increase in U.S. history when the provisions of the Tax Cuts and Jobs Act would expire,” the speaker said on CNN’s “State of the Union.” It might be easier said than done for Republicans to make quick work of a tax bill next year. Johnson also said on “Fox News Sunday” that Congress will likely punt government funding into the early part of next year, while the debt limit will also need to be dealt with in 2025. The GOP is also going to have to deal internally with a variety of internal challenges on taxes, including whether to offer some relief to the $10,000 cap on state and local deductions. And then there’s the challenge of incorporating some of Trump’s pet plans into any tax bill, with the incoming president potentially not deferring as much to Congress as he did with the 2017 tax law. For instance, Johnson called Trump’s idea to scrap taxes on tips “one of the promises that he wants to deliver on," though he also hinted at some of the budgetary challenges the GOP might face in crafting a big 2025 tax bill. “We're going to try to make that happen in the Congress,” Johnson said on CNN. "You have got to do the math. You have got to make sure that these new savings from American people can be paid for and make sure the economy is a pro-growth economy."
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