IRS 'prepared' for 2025 filing season, but potential spending cuts loom for the agency

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Hat tip, WTOP

MANAGEMENT
IRS ‘prepared’ for 2025 filing season, but potential spending cuts loom for the agency

For the 2025 tax filing season, the IRS is expanding several modernization efforts. But potential budget cuts on the table could curtail those efforts.

Drew Friedman@dfriedmanWFED
January 10, 2025 5:08 pm
5 min read

The Internal Revenue Service is preparing for a tax season that will look quite different for 2025, with the coming expansion of the agency’s Direct File program and other modernization efforts — but also a looming possibility of further IRS spending cuts led by Republican lawmakers.

For the 2025 tax filing season, the IRS’ Direct File program will be available in 25 states, more than doubling the 12 states where the IRS-run online filing system was an option for taxpayers in 2024. The IRS will begin accepting tax returns on Jan. 27.

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After citing the success of the Direct File program in 2024, more than 30 million taxpayers will now be able to use the system across the 25 states that opted in, the Treasury Department estimated. The IRS also plans to build on several other modernization efforts for 2025, including expanding its data import tool, covering more types of tax situations in Direct File, updating the “Where’s My Refund” tool, allowing more access to tax forms on mobile devices, and broadening alerts for potential tax scams.

But the future of the agency’s modernization efforts and the Direct File program is up in the air, with President-elect Donald Trump on the verge of his inauguration and the recent start of a new Congress with a Republican majority. Nearly 30 GOP lawmakers have already called on Trump and the Department of Government Efficiency to kill the Direct File program in an executive order on his first day in office.

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