If you found yourself one of the 140,000 Americans that used the Biden-Era free tax filing service “Direct File” last year – change could be coming by way of Elon Musk and DOGE (Department of Government Efficiency.)
The program is still available for this filing season – so if you were planning on getting your 2024 taxes in by April 15, 2025, using this program you can still do so.
But change is in the air. Along with the approximate cut of 7,000 probationary employees in February of this year, Musk plans to continue to trim the IRS’s budget by possibly eliminating the IRS Direct File. To use Direct File some limitations apply such as wage limits.
- If your wages are more than $200,000 ($168,600 if you had more than one employer).
- You file as Married Filing Jointly, and your spouse’s wages are more than $200,000 ($168,600 if your spouse had more than one employer).
- You file as Married Filing Jointly, and you and your spouse's wages are more than $250,000.
- You file as Married Filing Separately, and your wages are more than $125,000.
Other eligibility requirements like if you have unreported income like tips, or if you received distributions from an IRA will also kick you out of the eligible class able to use Direct File. Other limitations also apply.
The program is said to be efficient and easy to use, but it’s expensive. A June 2024 Treasury Inspector General for Tax Administration report estimated the annual costs of Direct File could be from $64 million all the way to $249 million.
The other issue is that the program’s legal standing at its inception is in question. The President of Americans for Tax Reform, Grover Norquist, said that because the IRS never got explicit permission from Congress to create the program, it was created and funded by unauthorized spending. He urges the DOJ to investigate this.
Finally in related news, the former IRS Chief Human Capital Officer, Traci DiMartini, was also recently placed on leave, following her resistance to the probationary employee cuts, and other issues with DOGE.
The probationary employees and many other federal employees were offered “deferred resignation program” buyouts, but some only available to IRS employees after tax season. The employees that were terminated had less than a year of service and were mainly in the auditors and collection departments. Taxpayer service staff were retained.
DiMartini was alleged placed on leave for “ineffective management,” and “insubordination,” for refusing to call employees into the office over a weekend to onboard a DOGE staffer and the directions of the New IRS Commissioner and for telling IRS staff where the staff cuts were coming from. Some sources say she is vowing to fight back, and the shake-ups in authority at the IRS and other changes are expected to follow.
As these changes persist and you find yourself in need of help navigating your tax issues with the IRS, let the experts as Bryson initiate or continue these communications on your behalf!
