IRS Should Not Prepare Your Taxes

The IRS is the nation’s tax collector. It should not also be the nation’s tax preparer.

When the same agency that collects taxes also calculates what you owe, a clear conflict of interest arises. The incentives point in only one direction: higher tax bills and less trust in the fairness of the system.

That is why proposals to expand the IRS “Direct File” system are misguided. Americans should not have to rely on the tax collector to prepare the very returns that determine how much they owe.

The good news is that a better solution already exists.

Direct File Creates a Conflict of Interest

Supporters of IRS Direct File argue that taxpayers need a government-run filing system to avoid paying for tax preparation. Democrats have even proposed expanding the system nationwide through legislation such as the “Direct File Act,” a proposal covered in outlets like The Verge.

But Direct File asks taxpayers to trust the IRS to both calculate and collect their taxes. That structure puts the agency in the position of preparing returns in a way that could increase tax liability.

Even if the IRS operates in good faith, the perception problem remains. Taxpayers should not be forced to rely on the tax collector to determine how much tax they owe.

That arrangement undermines confidence in the system and concentrates too much authority inside a single agency.

Return-Free Filing Has the Same Problem

Some critics of Direct File argue that the solution is “return-free filing,” where the IRS calculates your taxes and sends you a bill or a refund.

But that proposal suffers from the same conflict of interest.

Under return-free filing, the IRS would still be responsible for calculating a taxpayer’s liability. The agency would essentially prepare your tax return and then ask you to accept the result.

Again, the tax collector would also be acting as the tax preparer.

That arrangement does not solve the underlying problem.

The Solution Already Exists: IRS Free File

There is a better option that avoids this conflict entirely.

It is called the IRS Free File Alliance, a long-standing partnership between the IRS and private-sector tax software companies that allows eligible taxpayers to prepare and submit their tax returns online for free.

Through the program, taxpayers can use trusted private-sector tax preparation software directly through the IRS website.

Because the tax return is prepared using independent private software rather than by the IRS itself, the conflict of interest disappears.

The IRS collects the tax return, but it does not prepare it.

Who Qualifies for Free File

The program is widely available. According to the IRS, most Americans qualify to use IRS Free File.

For the 2025 tax filing season, taxpayers with an adjusted gross income of $84,000 or less can access guided tax preparation software through IRS Free File.

That threshold means tens of millions of American households are eligible to prepare and file their federal tax returns entirely online at no cost.

The system works much like commercial tax software used by paid filers. The software asks questions, walks taxpayers through the process step by step, calculates credits and deductions, and electronically files the return with the IRS.

In other words, taxpayers receive the same modern software tools many people already use, but without paying for them.

A Proven Public-Private Partnership

The IRS Free File Alliance represents a practical example of how public-private partnerships can improve taxpayer services without expanding government authority.

Taxpayers benefit from modern software and free filing options. The IRS benefits from electronically filed returns that reduce processing costs and errors.

Most importantly, the arrangement preserves a critical safeguard: the IRS remains the tax collector, not the tax preparer.

That separation helps maintain fairness and public confidence in the tax system.

CFE Takeaway

The debate over tax filing is often framed as a choice between government-run filing systems and expensive private tax preparation.

But that is a false choice.

The real solution already exists. The IRS Free File Alliance allows millions of Americans with straightforward tax situations to prepare and file their returns using private-sector software at no cost.

That approach avoids the conflict of interest created when the IRS prepares taxpayers’ returns while also collecting their taxes.

The IRS should remain the tax collector. Private tax software should remain the tax preparer.

For millions of Americans, the Free File program already delivers exactly that.