IRS Direct File - Good? Bad?

My taxes are pretty simple these days and I generally find a way to file for free (Currently use FreeTaxUSA, no need to buy TurboTax or H&R Block). But I’ve always thought we shouldn’t have to pay to file our taxes and there should be more options from the IRS to file. I wouldn’t mind being part of the pilot program to check it out. I assume it will handle standard stuff (income, interest, dividends, stock gains and losses). I don’t know about more complex situations.

Me too, and for that reason I file paper returns. If the IRS can’t figure out how to accept my return without going through a third party (even if the third party will do it for free), they can scan my return and enter the numbers themselves. Somehow every state I’ve lived in can set up an easy web portal to do state taxes.

My state has an online filing system for state taxes that is excellent – you put in your info and it calculates your tax refund/amount due. It is for people under a certain income limit, and I believe, if there are some complicated aspects, you can’t use it. But is certainly takes care of a big percentage of filers, which probably allows the customer service to help those who have complicated or changed situations. There is no reason the IRS couldn’t have the same type of service. Then people who have questions/problems can get hold of customer service person!

I recently had to file a simple form for a non-profit. IRS does not accept paper copies and the 3rd party cost us over $60. I spent hours and 6 submissions trying to find the reason for rejection. The company accepted the filing but irs rejected it with a somewhat cryptic error. Asking the filing company for help would have cost us extra.

The error was as follows and did not tell which of the items on 8 pages it refered to:

Error Details

The XML data has failed schema validation. cvc-pattern-valid. Value ‘’ is not facet-valid with respect to pattern ‘([!-~£§ÁÉÍÑÓ×ÚÜáéíñóúü] ?)*[!-~£§ÁÉÍÑÓ×ÚÜáéíñóúü]’ for type ‘ExplanationType’.

It would have been easier if ‘explanation type’ actually read ‘description’ so I could have found the proper item to correct. The error above equates to "The description field was empty’. I am a programmer and it took me quite a while to search the above and try to decode what they wanted. The 3rd party has a webpage that does not look like the tax form; more like questions and answers. At least Taxcut or TurboTax would have been easier.