An Internal Revenue Service advisory committee has said the agency should assess the cost of expanding awareness of existing free tax filing programs before developing a new filing tool for taxpayers.
In a report published Tuesday, the Electronic Tax Administration Advisory Committee (ETAAC) asked the tax authority to assess how much it would cost to improve public understanding of commonly used services run by the Free File Alliance, the Tax Assistance program volunteer income tax and tax advice. for the Elderly.
The intervention comes as the Internal Revenue Service and the US Digital Service work to develop a free prototyping servicewhich is expected to be made available to certain taxpayers in January 2024.
ETAAC is an advisory committee that provides a public forum for the discussion of electronic tax administration issues. Last September, the committee appointed eight new members, including District of Columbia Deputy Chief Financial Officer and Tax Commissioner Keith Richardson and Code for America Senior Director RaeAnn Pilarski.
In the new report, the committee cited previous work by the nonprofit MITER Corp., which identified low participation rates in existing free filing programs and found a low level of awareness among consumers. In 2018, only 3 million of the nearly 104 million eligible taxpayers used a free filing product to file their federal tax returns, according to the MITER study.
The committee said: “ETAAC reiterates MITER’s conclusion and joins the recommendation that Congress appropriate funds to increase awareness of existing free filing options and encourages the IRS to make use of free e-filing resources that you already have at your disposal to promote greater adoption of Free File.”
He added: “ETAAC further recommends that the IRS work with the Free File Alliance and other software industry associations to continue to improve the Free File program. This could include expanding eligibility (in terms of ‘adjusted gross revenue) and the communication and marketing opportunities for the program.”
Details of the IRS’ new prototype tax filing platform were first reported by the Washington Post when the Treasury in May delivered a report to Congress on the feasibility of building this service. This study was conducted on behalf of the IRS by the nonprofit New America and was funded with $15 million included in the Inflation Reduction Act.
Other new ETAAC recommendations include that the IRS make tax information documents available digitally in real time to facilitate the use of third-party filing software and that the agency prioritize and allocate funds for the modernization of ‘IRS.gov and Search Engine Optimization.
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