Tuesday, May 21, 2024

Louisiana Treasurer Fleming Voices Opposition to IRS Tax-Filing Program

by BIZ Magazine

Baton Rouge, Louisiana – Louisiana State Treasurer John Fleming, M.D., has expressed strong opposition to the Internal Revenue Service’s (IRS) newly launched Direct File pilot program, raising concerns about its implications for taxpayers and state treasuries alike.

The Direct File program, introduced by the IRS for taxpayers in 12 states, allows the agency to act as both tax preparer and enforcer. Dr. Fleming cautioned against this consolidation of power, stating, “The Direct File program will allow the IRS to become entirely too powerful as tax preparer, collector, and enforcer. It is a scary thought.”

Moreover, Dr. Fleming criticized the program as wasteful and unnecessary, noting that there are already 30 organizations offering free tax preparation services. The estimated cost of the Direct File program is a staggering $250 million, a burden that falls on taxpayers while benefiting the IRS.

The Direct File initiative is part of the Inflation Reduction Act, passed by a Democrat-controlled Congress and signed into law by President Joe Biden in 2022. This legislation granted the IRS a substantial $80 billion increase in its budget, enabling the hiring of an additional 87,000 agents.

In solidarity with 20 other state treasurers belonging to the State Financial Officers Foundation, Dr. Fleming opposes the Direct File program, labeling it as “flawed” and warning of its potential negative consequences for state treasuries.

One significant drawback highlighted by Dr. Fleming is the program’s focus solely on federal tax returns, leaving filers potentially unaware of the need to file state tax returns. This oversight could result in state tax penalties for taxpayers and the loss of available state tax refunds.

Echoing Dr. Fleming’s concerns, taxpayer advocate David D. Ransom of the American Coalition for Taxpayer Rights emphasized that the Direct File program would neither be free nor easy to implement. Ransom also expressed skepticism about the program’s ultimate benefit to taxpayers due to the inherent complexity of the U.S. tax code.

As debate surrounding the Direct File program continues, Dr. Fleming remains committed to protecting the interests of Louisiana taxpayers and advocating for responsible tax policies that promote transparency and fairness.

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