Barrasso Fights Back Against Supercharged IRS

Hearing

“I want to talk with you about this direct file pilot program.

There's been a lot of controversy surrounding the IRS starting up this direct filing portal that could replace successful private sector options that are currently available to taxpayers around the country.

Unlike the current free file process, which partners with the private sector, this would be solely handled by the Internal Revenue Service, making the IRS both a tax collector as well as the tax preparer.

The so-called ‘Inflation Reduction Act’ did provide $15 million for the IRS to study the feasibility of a government-run direct file system, but it didn't provide statutory authority to create and operate a new multimillion-dollar direct file program.

In classic big-government fashion, the IRS spent $130 million on a direct file program, and only 55,000 people, as of at least a couple of weeks ago, used the program. So, the IRS spent over $2,000 per taxpayer.

And when you compare that to the private sector free file options, serving roughly 30 million taxpayers, it cost the taxpayers and the government nothing.

So, 18 state treasurers, including my Wyoming State Treasurer, Curt Meier, sent a letter asking you to terminate the program. They called this a ‘solution in search of a problem.’

The Treasury Inspector General for Tax Administration has also raised some concerns. Last week, the Government Accountability Office released a report listing out problems with this new IRS program.

So, do you think the IRS can do a better job than the private sector at helping taxpayers?

I'll see the State Treasurer this weekend at home in Wyoming. And he's a big private sector guy, as am I. And the question is, does the private sector have the same, what I would consider, maybe a conflict of interest that the IRS has, if the IRS is the tax collector, the tax auditor, the tax enforcer, and now the tax preparer? A judge, jury, and Lord High Executioner.

What safeguards does the IRS have in place to protect taxpayers from conflicts of interest, as well as any additional information the IRS will now have relating to taxpayers?

When you were here last year, I voiced my concerns about funding priorities. The so-called ‘Inflation Reduction Act’ allowed roughly $80 billion to the Internal Revenue Service. $45 billion went to enforcement compared to only $3 billion in taxpayer services. And we talked about that in my office and talked about it in the hearing.

From the recent budget request, the IRS asked for another $104 billion in mandatory spending of that, $59 billion for enforcement. This would be on top of almost $5.5 billion provided for enforcement annually through regular appropriations.

Are small business owners and hardworking taxpayers really going to be protected from some of the burdensome onslaught of audits if you spend more than $100 billion on auditors and enforcement agents in the next 10 years?”

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