IRS Misbehavior

The IRS wants to be the one to figure the taxes owed by us average Americans, and the IRS wants to do the figuring based on the data the IRS claims to have collected on each of us average Americans.

The Inflation Reduction Act, that travesty that too many Republicans actually voted for and that is a source of the present inflationary environment (among a number of economic problems inflicted by the IRA), authorized the IRS to explore the concept of a mechanism that would have the IRS figure our taxes for us.

Specifically, the legislation required a study by an independent third party examining the idea’s feasibility, as well as a report by the IRS for Congress assessing the study, the cost of such a system, and taxpayer opinions based on surveys.

In no way did the IRA authorize the IRS to go ahead and build such a facility. IRS Commissioner Daniel Werfel assured the Senate Finance Committee and the House Ways and Means Committee that the IRS that he runs, in fact, was not building such a facility.

No decision has been made on moving forward with direct file solution[.]


I don’t know yet whether the direct file solution is the right additional menu item to put in place so that taxpayers that prefer to engage that way can do it. What I’d like to do is have the report issued. And then engage in a conversation with the right set of stakeholders and then figure out what the go-forward is.

Aside: No one on the House committee—to whom that last quote was directed—asked Werfel who he thought were the right stakeholders.

It turns out, though, that the IRS has gone ahead and developed precisely that “We’ll Figure Your Taxes For You; Don’t You Worry Your Little Heads About It” facility.

[T]he IRS had been quietly building an actual prototype of direct file before submitting the report to Congress, as The Washington Post first reported in May. The IRS announced its final report one day after the Post‘s revelation. The IRS system will reportedly be available through a pilot program for a small group of taxpayers by January, when the 2024 filing season begins.

The IRS offered this in response to queries:

[T]he IRS told Fox News Digital that the prototype was built only to help with survey data to gauge the opinions of taxpayers on a direct file system.

Sure. Maybe folks might be interested in some beachfront property north of Santa Fe, too.

Senate Finance Committee Ranking Member Mike Crapo (R, ID) had this:

This suggests a pre-determined outcome and flies in the face of previous commitments Commissioner Werfel made to publicly consult Congress on a potential free-file solution, and for the IRS to not act without explicit legal authority[.]

What he said. Congress needs to drastically reduce IRS funding to little more than its payroll needs (which do not include the $80 billion (only somewhat reduced by the debt limit deal) appropriated for all those extraneous new IRS “auditor” hires). Since the IRS—with Werfel’s acquiescence, if not active permission—is going to misuse the funds it’s allocated, those funds need to be cut off.

Also: Did Werfel lie to Congress when he said no such a thing was in progress? Or was he merely incompetently oblivious to what was going on in his IRS?

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