Pay Your Taxes, not a Big Tech Company

This year, the Internal Revenue Service (IRS) is rolling out a pilot program across 12 states that will allow many working class people to file their taxes quickly and easily online, for free. The new program, called Direct File, is the work of a multiyear effort of many A Grand Alliance partners, who advocated for a public option in tax preparation. Their effort, organized as the Coalition for Free and Fair Filing, estimates that Americans spend 1.7 billion hours and $31 billion every year to file their taxes, with most of that money going to giant tech companies like Intuit, the parent company of TurboTax.

The pilot makes Direct File available to users in Arizona, California, Florida, Massachusetts, New Hampshire, New York, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

But the possibility of an accessible and affordable public option for tax preparation isn’t just about denying money to the big tech companies, it’s also an effective way to ensure that people who are entitled to tax breaks and other benefits are able to receive that money. The IRS estimated that in 2021, 9 million people who qualified for various tax benefits did not receive them because they didn’t file their taxes. More than 20 percent of families eligible for the Earned Income Tax Credit did not claim it.

These are mostly people of very modest incomes who normally wouldn’t file their taxes either because they earn too little, they can’t afford the time or cost of filing, or face other barriers. A free Direct File tool would help these people access the benefits they deserve, increase trust in good government, and help alleviate poverty.

Who could argue with providing good quality public services that save millions of people money? It shouldn’t surprise any regular reader of this column, but big corporate interests lobbied hard against efforts to make Direct File available to the public. The Coalition for Free and Fair Filing estimates that the tax prep industry spent over $80 million fighting the Coalition’s efforts in Congress and with the IRS. The big tax prep companies don’t just want to squash the Direct File initiative, they have a multi-year effort to steer people away from other free filing options.

In fact, Intuit was recently hit with a $141 million court settlement for intentionally steering low-income filers away from publicly available free filing options and onto their platform, which was deceptively marketed as “free” when in fact filers faced fees after completing their returns.

It’s hard to get excited about filing taxes. As postal workers, you may wish that more people sent their taxes through the mail; more than 90 percent of all people file online. But the simple fact is that a handful of companies have been ripping off working class people for years, taking their hard-earned money for providing what should be a simple and reliable public service. While Direct File is only in its pilot stage, it’s a step in the right direction for those who care about public services, our democratic rights, and fairness for working people. To find out more from the Coalition for Free and Fair Filing, visit betterirs.org. If you live in one of the 12 states above and think you may be eligible for Direct File, you can find more information at directfile.irs.gov. ■