The Internal Revenue Service is moving ahead with a plan to build its own free tax filing program, known as Direct File, announcing Tuesday that a pilot version will be available to some taxpayers in 13 states next year.
Armed with an influx of new money approved by Democrats last year, the IRS is conducting a major overhaul of its operations – despite continued threats from Republicans to cut future funding and even abolish the agency altogether.
Eventually, the IRS tax filing system could serve as an alternative to private tax preparation companies like H&R Block and Intuit’s TurboTax.
But for now, the online pilot program will be very limited in scope. Only taxpayers in those 13 states with specific, eligible tax situations will be able to participate.
The IRS anticipates that at least several hundred thousand taxpayers will decide to participate in the pilot.