
by Dick Hall-Sizemore
The 2022 federal Inflation Reduction Act directed the Internal Revenue Service (IRS) to prepare for Congress a report on โa potential IRS-run free direct e-file tax return system (Direct File).โย After delivering the report to Congress, the IRS proceeded to develop a pilot e-file tax return system and made it available to taxpayers in 12 states for the 2024 filing season.
The response of taxpayers to IRS surveys was highly favorable, as were reports in the media (see here and here). After making adjustments to the program based on results from the pilot, the IRS announced that it would make the program, called Direct File, available nationwide in 2025.
Direct File, as used in the pilot, was limited to relatively simple tax returns. For example, all of a taxpayerโs income had to be from wages and no more than $1,500 in interest income. Also, only the standard deduction was available. In its announcement of nationwide application, the IRS stated it was examining ways to expand the number of tax situations the program could cover in 2025 and in the future. Millions of taxpayers across the country will have the option in 2025 of directly completing and filing their income tax returns electronically, at no cost, with the IRS.
Alas, Virginia taxpayers will not be in that number.












