SC Nebraska News

Washington, D.C. – Rep. Adrian Smith (R-NE), alongside Ways and Means Committee Chairman Jason Smith (R-MO), led their Republican colleagues in sending a letter to Internal Revenue Service Commissioner Daniel Werfel. The letter expressed concerns about the expansion of the IRS' Direct File program and requested answers regarding its statutory authority and funding sources.

The letter stated: "We write to you now that this year’s tax filing season has come to a close to reiterate our objections to the Internal Revenue Service’s (“IRS”) Direct File pilot program and inquire about the program’s cost, operation, and future."

The members alleged that the decision to establish Direct File was predetermined. They noted that Democrats allocated $15 million in the Inflation Reduction Act (IRA) for studying the feasibility, taxpayer interest, and cost of a direct e-file tax return system. The IRA required this study to incorporate opinions from an independent third party. The letter claimed that the Biden Administration manipulated outcomes to favor a Direct File program.

In February 2024, objections were raised against establishing this program without Congressional authorization. Attorneys General from 13 states joined these objections, labeling Direct File as "unnecessary and unconstitutional."

The Treasury Inspector General for Tax Administration (TIGTA) found in October 2023 that taxpayer interest might have been overstated due to flawed survey design by the IRS. TIGTA reported that while 72 percent of taxpayers showed interest in Direct File according to IRS surveys, an independent report indicated only 37 percent of taxpayers with simple returns would use such a system.

The end of the filing season prompted questions about Direct File's cost, operation, and future amid concerns over expanding IRS power at taxpayer expense. The committee emphasized its commitment to fostering a tax system serving American needs without creating costly tools already available.

Signatories included Reps. Vern Buchanan (R-FL), Mike Kelly (R-PA), Darin LaHood (R-IL), Brad Wenstrup (R-OH), Jodey Arrington (R-TX), Drew Ferguson (R-GA), Ron Estes (R-KS), Lloyd Smucker (R-PA), Kevin Hern (R-OK), Carol Miller (R-WV), Greg Murphy (R-NC), David Kustoff (R-TN), Greg Steube (R-FL), Claudia Tenney (R-NY), Michelle Fischbach (R-MN), Blake Moore (R-UT), Michelle Steel (R-CA), Beth Van Duyne (R-TX), Randy Feenstra (R-IA), Nicole Malliotakis (R-NY) and Mike Carey (R-OH).

In January 2023, Reps. Adrian Smith and Michelle Steel's bill aimed at repealing the Biden Administration’s $80 billion IRS expansion became the first bill passed by the House in the 118th Congress. This bill also sought to repeal the initial study on providing direct file services.

In April 2024, Smith led his colleagues in requesting defunding of the Direct File program for FY 2025 from the House Appropriations Committee.