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Wednesday February 21, 2024

Washington News

Washington Hotline

IRS Direct File 2024 - No State Tax Returns

The Internal Revenue Service (IRS) continues to work on the direct-file software project. The IRS has tentatively promised to deliver a tax software program for the 2024 tax filing season.

IRS surveys indicated that taxpayers were interested in using a direct-file software program, but that they would strongly prefer that it also enable them to file their state tax return. On July 26, IRS Commissioner Danny Werfel wrote a letter to all state tax administrators and requested input on methods to integrate the IRS direct-file software with state tax systems. He acknowledged that there may not be sufficient time to include the state tax returns in the 2024 IRS software.

The IRS plans to include state tax returns in future software. However, the IRS is currently exploring options to "include limited State income tax filing information sharing to help facilitate State tax return filing for the taxpayer." It now seems likely that the state tax returns will be deferred to a future release date.

In other news, the IRS announced it is expanding the Tax Pro Account capabilities of IRS.gov. The enhancements are designed to enable CPAs and other tax preparers to view taxpayer information online. Tax Pro Account users will need to authorize their tax preparer to have access to their information.

IRS Commissioner Danny Werfel stated, "Tax professionals provide a vital service to taxpayers and the nation, and the IRS is committed to making improvements to help them serve their clients. As part of our transformation efforts, we will be working to add new technology and expand our relationship with the tax professional community. The ongoing improvements to the Tax Pro Account are just part of a larger effort."

The Tax Pro Account is a digital self-service portal for both taxpayers and tax professionals. A common use of the account is for the taxpayer to authorize representation, by accepting Power of Attorney (POA) and Tax Information Authorization (TIA) requests from the tax professional. The new system allows the taxpayer to approve the request of the tax professional and for the authorization to be effective immediately.


Published October 6, 2023
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