Defending Free and Fair Tax Filing in the Appropriations Fight
Congress may have averted a government shutdown for now, but the appropriations fight continues and we need to make sure our representatives invest in the Internal Revenue Service (IRS) to secure free and fair tax filing. Filing taxes should be free and fair, yet chronic underfunding of the IRS has meant that millions of us have to pay for a complicated service that should be free and simple, while wealthy tax cheats game the system to avoid paying their fair share. This disparity in tax filing increases inequities, especially since one in five eligible low-income families don’t collect the Earned Income Tax Credit (EITC) because it’s too hard or expensive to file taxes.
On top of this, the wealthiest 1% avoid paying $163 billion in taxes that they owe each year. We did not reach this point by accident. The historic underfunding of the IRS and the tax prep industry’s years-long efforts to block free tax filing options have hampered the agency’s work while maximizing profits for tax prep companies and wealthy individuals. We need our representatives to show their leadership by defending IRS funding and not undoing progress made over the past year.
Thanks to the Inflation Reduction Act (IRA), Congress is beginning to reverse the trend of underfunding the IRS and moving the nation toward a more just and equitable tax system, one where people can access their full tax benefits and wealthy tax cheats pay their fair share. In the last year alone, IRA funding allowed the IRS to answer three million more customer phone calls, reduce our country’s backlog of tax returns by 80%, and ensure that 175 wealthy tax cheats paid the $38 million they owed. If we are not proactive in investing in the IRS, then all that progress could be derailed by the same forces that hindered the agency for decades.
In the fight over government funding, House Republicans threatened to cut $67 billion in funding from the IRS, undoing much of the progress made since the IRA investment and blocking the development of vital free tax filing software, Direct File. Recent polling from Hart Research, commissioned by Economic Security Project Action and Groundwork Action, shows that voters want Congress to protect IRS funding. A majority of voters (55%) said they would disapprove of shutting down the government to force cuts in IRS funding and 56% of voters would be less likely to support a candidate if they attempted to block funding for the Direct File program.
At the end of the day, to effectively guarantee a just and accessible tax system, Congress must safeguard crucial funding for the IRS and stop House Republicans from forcing more draconian cuts. Fortunately, several Congressional leaders and advocacy organizations are committed to defending IRS modernization efforts.
In August, Sen. Elizabeth Warren, U.S. Rep. Don Beyer, and U.S. Rep. Katie Porter joined a Coalition for Free and Fair Filing press conference to reiterate that they would stand up to protect IRS funding. The ProsperUS coalition also recently sent a letter to House and Senate leadership outlining the importance of protecting and expanding IRS funding.
By defending the existing funding levels for the IRS and pushing for more investment, the agency can modernize its operations, ensure tax filers can access their full tax refund, and develop a free and simplified tax filing tool that will take the cost and headache out of tax filing for tens of millions of people.
By: Adam Ruben, (he/him)
Vice President of Campaigns and Political Strategy for Economic Security Project
This blog was authored by Adam Ruben, Vice President of Campaigns and Political Strategy for Economic Security Project, an organization that advocates for ideas that build economic power for all Americans. Economic Security Project is also a core member of the Coalition for Free and Fair Filing, a group committed to supporting the IRS Direct File project and ensuring that online tax filing is free and easy.
