The IRS’s Direct File program is a curse for Idaho taxpayers | Opinion

It’s springtime, which means most of us have finished doing our taxes. Tax season is never fun but at least Idaho makes it relatively easy: our flat income tax and simple tax structure make filing a lot easier than in, say, New York.

Still, federal taxes can be a headache — and now Washington wants to make it even worse. The IRS is running a convoluted tax experiment, and many Idaho taxpayers may have ended up as guinea pigs.

The trouble began under the Biden administration that passed a bill in 2022, which included a provision — largely overlooked at the time — to create an IRS pilot program called Direct File.

Direct File was supposed to allow the IRS to prepare taxpayers’ tax returns instead of accountants or private tax preparation software. At first blush, it sounded appealing, like the IRS was trying to slash red tape. Who wouldn’t want to cut out their accountant or their TurboTax subscription?

But this is the IRS we’re talking about. Slashing red tape is not what they do.

According to Idaho Sen. Mike Crapo, the initiative is “unnecessary, problematic, costly, and illegitimate.”

What Direct File does is create a conflict of interest whereby the government helps taxpayers claim tax credits and exemptions even though it also benefits from minimizing those claimed tax credits and exemptions. More money in your pocket, after all, means less money for the feds.

We’ve already seen what this looks like in action. According to a March 2025 Inspector General report, the IRS’s Direct File pilot flat out failed to list certain education tax credits from Form 8863. Hundreds of returns that had been submitted through Direct File would have been eligible for these credits and excluding them cost each of those taxpayers an average of nearly $1,000. That’s some serious savings—savings that Direct File users were denied. With in-state costs at the University of Idaho, for example, running an average of $12,000 after financial aid those savings would have been helpful.

This gets to the danger of the Direct File program: it risks giving the IRS a monopoly over the tax process without accountability or visibility for the average taxpayer The IRS might want that, but given that only 38% of Americans have a favorable view of the agency, most of the rest of the country likely disagrees.

While Idahoans didn’t qualify to use Direct File in 2024, that changed this year, and thousands of this state’s residents likely utilized the program to prepare their taxes.

Traditionally, most taxpayers use accountants or third-party software like TurboTax to file their taxes, which is available to many for free. These solutions are popular, comprehensive, and — most importantly — motivated to help taxpayers save money rather than send as much as possible to the IRS.

To say Direct File isn’t as powerful as either of these two tax filing solutions would be an understatement. Direct File doesn’t even allow you to fill out state tax returns. So if you decide to use it for your federal taxes, you’ll still need an accountant or TurboTax to finish your Idaho tax forms. That’s like getting a coupon for a free haircut – but the barber only cuts the left side of your hair…what’s the point?

Instead of the government providing a service no one asked for, they should focus on the real problems at hand. They can begin by simplifying the U.S. tax code, among the most byzantine on earth, with Idaho’s flat income tax rate of 5.3 percent a model to emulate.

Congress could also work to close the unprecedented budget deficit by cutting wasteful spending, as Elon Musk’s Department of Government Efficiency (DOGE) has sought to do. Again, Idaho can be a model: we ended the 2024 fiscal year with a $52.5 million revenue surplus and our rainy day fund is one of the most robust in the nation.

Among the waste that DOGE has sought to cut is … the IRS’s Direct File program. Why? Well, the new 2025 Inspector General report expressed concern that it will end up exceeding $60 million to create despite taxpayers not being thrilled to use it.

That’s $60 million for a clunky, unpopular tool that Idahoans didn’t ask for and don’t need. We’re not a test market for bad federal ideas — we’re a state that believes in doing things the right way, the first time.

What Idahoans need isn’t another program at the IRS. They need common-sense tax reform that respects their time, their wallets, and their intelligence. Next year, let’s keep our tax season simpler—and keep D.C.’s experiments out of Idaho.

This story was originally published April 24, 2025 at 4:00 AM.