Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories. BACK ON DIRECT FILE: Let’s put it this way — it’s certainly possible that an IRS free electronic filing portal would become less popular when it’s no longer a hypothetical, and taxpayers have a real working system (with potential bugs and frustrations) to consider. For their part, private sector tax preparers and conservative groups surely will continue to press their case against an IRS direct file option, including arguing that the agency’s resources would be better spent elsewhere. But it’s also interesting to see both sides making essentially a populist case for or against direct file, just with a different bogeyman for taxpayers. (Interesting, though maybe not thoroughly surprising, given both sides maintain their preferred outcome would be better for the average taxpayer.) For opponents, the enemy here is big government and giving too much power to the IRS, with conservatives particularly worried about the potential prospect of the agency filling in simpler returns for taxpayers — a practice popular in some other countries. And for supporters, that enemy is big tax prep, who they argue have been trying to keep millions of taxpayers from getting the options that they deserve. “The only reason the IRS does not currently offer a free tax filing option is because tax prep companies lobbied extensively to protect their profits and stood in the way of free tax filing options,†Adam Ruben of the Economic Security Project said in announcing the newest polling results. Semi-related note: The Senate Finance Committee last week released the follow-up questions in writing that tax writers sent to Marjorie Rollinson, President Joe Biden’s pick to be IRS chief counsel, as well as her answers. In lots of ways, those 39 pages are less interesting for Rollinson’s answers, given that she generally can’t or will not respond all that substantively before officially being on board. But the questions that senators focused on does give more of a window into their priorities — including both Sens. John Barrasso (R-Wyo.) and Steve Daines (R-Mont.) expressing some deep skepticism about the direct file pilot program. Barrasso also followed up on the 1099-K information returns that could go to millions of users of eBay, Venmo and other online sites next year. Other areas of interest: Sen. Sheldon Whitehouse (D-R.I.) pressing Rollinson on the Foreign Accounts Tax Compliance Act, and both Sen. Mike Crapo of Idaho, the panel’s top Republican, and Sen. Bill Cassidy (R-La.) questioning the agency’s recent behavior in a syndicated conservation easement case. ENHANCED SUPERVISION: Treasury’s inspector general for tax administration, that aforementioned IRS watchdog, on Friday released its plan for overseeing how the agency will implement the tens of billions of dollars it received from the Democrats’ Inflation Reduction Act. The IRS has released its own strategic plan outlining how it would use those funds, with a focus on five areas — improving taxpayer services, resolving taxpayer problems, expanded enforcement focused on wealthier taxpayers, improved technology and building a stronger workforce. For its part, TIGTA says it has been preparing more robust oversight efforts in all those areas. That report on the direct file option and another on the use of artificial intelligence are among the papers scheduled on taxpayer services, while the inspector general plans to examine debt resolution and refundable tax credits while looking into the IRS’s ability to help taxpayers with their issues. TIGTA will also inspect the IRS’s audit process as the agency ramps up enforcement and its technology improvement efforts, while examining its real estate holdings and hiring process as it considers workforce issues. So much more oversight: TIGTA separately also released its planned audit list for the current fiscal year on Friday, which included some of those IRA-related reports and other topics. Some reports to look out for: Examinations of cryptocurrency tax issues, agency employees who aren’t compliant on their taxes, identification numbers for tax preparers and taxpayer assistance centers.
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