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This tax season, IRS launches e-filing, goes after wealthy tax evaders

AYESHA RASCOE, HOST:

Have you done your taxes yet? April 15 is less than a month away. So far, the IRS says this year's filing season is going smoothly - no more paper returns piling up in government cafeterias or frustrated callers giving up on unanswered phone lines. The agency is investing billions of dollars to improve customer service and to go after wealthy tax cheats, and the IRS wants people to know about that. NPR's Scott Horsley joins us now with a progress report. Hi, Scott.

SCOTT HORSLEY, BYLINE: Good morning, Ayesha.

RASCOE: So we're about two-thirds of the way through the tax filing season. What are you hearing about it so far?

HORSLEY: Well, at last count, the IRS had received a little over 71 million tax returns. That's about half the total it expects to get before the deadline next month. Ninety-eight percent of those returns have already been processed, so very little backlog. About 7 in 10 people filing so far have gotten a refund. And the average refund's about 6% larger this year than it was last year.

RASCOE: Well, that all sounds pretty good.

HORSLEY: It does. But, you know, even when everything's going smoothly, the tax collector is always kind of a whipping boy. IRS Commissioner Danny Werfel acknowledged that this past week when he opened a speech at American University with a video clip from "The Simpsons."

(SOUNDBITE OF TV SHOW, "THE SIMPSONS")

DAN CASTELLANETA: (As Homer Simpson) Taxi.

JULIE KAVNER: (As Marge Simpson) Oh, look, Homer, the IRS.

CASTELLANETA: (As Homer Simpson) Boo.

HORSLEY: Commissioner Werfel agreed that customer service at the agency was pretty bad in recent years, but he says it's getting a lot better.

(SOUNDBITE OF ARCHIVED RECORDING)

DANNY WERFEL: Sometimes, it's the little things, like that this filing season, we added a call back option on our main 1-800 number, ending the era of taxpayers being required to stay on hold listening to elevator music.

HORSLEY: The IRS has also hired thousands of telephone operators to help with those calls. It's opened dozens of new walk-in centers to handle in-person questions. And it's beefing up its website so more people can get answers that way.

RASCOE: Well, maybe that will make Homer stop booing the IRS so much. The IRS is also helping some taxpayers file electronic returns directly with the government for free. How's that going?

HORSLEY: Yeah, that's a new service called Direct File, and it's in the very early stages. Right now, it's only available to taxpayers in a dozen states and only those with pretty simple tax returns. So it's being rolled out very cautiously. The formal launch was less than two weeks ago. And since then, more than 50,000 people have given it a try. By comparison, TurboTax last year prepared 45 million tax returns - so small-scale right now. But if this pilot program's successful, the IRS would like to expand it. And that's drawing stiff opposition from the commercial tax prep companies, as well as their GOP allies in Congress. Here's West Virginia Congresswoman Carol Miller dressing down the IRS commissioner last month.

(SOUNDBITE OF ARCHIVED RECORDING)

CAROL MILLER: I mean, you've got to be kidding me. Nothing is free. Everything the U.S. government does is paid by taxpayer dollars, so nothing is ever free. And I don't think you should be wasting your millions of dollars when the private industry is doing a good job.

HORSLEY: Now, Werfel said repeatedly, if people like using commercial software or having their accountant do their taxes, that's just fine. Direct file is just one more tool.

(SOUNDBITE OF ARCHIVED RECORDING)

WERFEL: The goal is to provide taxpayers with options. And what we heard from taxpayers - and we heard it pretty loudly - was that there was an interest in having an option where they could file directly with the IRS for free.

HORSLEY: And there could be big savings. You know, right now, the average person spends about $140 a year just preparing their taxes.

RASCOE: The IRS is also cracking down on wealthy tax cheats. Any update on how that's working out?

HORSLEY: You know, for years, the IRS was starved for resources. But under the Inflation Reduction Act, Democrats allocated $80 billion for the tax collector over a decade. Part of that money is being spent to go after wealthy individuals and companies who have avoided paying the taxes that they owe. And, you know, the IRS wants to make a splash with this. They are auditing the use of corporate jets. They're targeting billionaires who are behind on their tax bills. Commissioner Werfel says the agency's also zeroing in on 125,000 wealthy people who haven't even filed a tax return for the last six years.

(SOUNDBITE OF ARCHIVED RECORDING)

WERFEL: We will not allow these higher-income individuals to fail to do their basic civic duty of filing a tax return and paying what they owe.

HORSLEY: Now, Republicans keep trying to chip away at that IRS funding. They've already cut the $80 billion down to about 60 billion. But that's counterproductive in terms of the federal budget because every dollar spent on tax enforcement brings in between 2 and 6 dollars in additional revenue. And beyond the revenue, there's also the fairness issue here. After all, when you sit down to do your taxes this year, you want to know that everyone else is paying their fair share.

RASCOE: That's NPR's Scott Horsley. Thank you so much, Scott.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Ayesha Rascoe is a White House correspondent for NPR. She is currently covering her third presidential administration. Rascoe's White House coverage has included a number of high profile foreign trips, including President Trump's 2019 summit with North Korean leader Kim Jong Un in Hanoi, Vietnam, and President Obama's final NATO summit in Warsaw, Poland in 2016. As a part of the White House team, she's also a regular on the NPR Politics Podcast.
Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.