IRS considers free e-filing system to challenge tax prep companies.
The IRS has developed a prototype system in partnership with the White House's technology consulting agency, U.S. Digital Service, to allow Americans to file tax returns digitally and free of charge. The system will be available through a pilot program for a small group of taxpayers by January 2024. The move could disrupt the tax-prep industry, which is estimated to be worth $14.4 billion this year. The IRS currently refers people seeking no-cost filing options to a consortium of companies that provide free e-filing for taxpayers below a certain income level, but fewer than 3% of taxpayers use them.