To the Editor Re: The IRS is expanding its free tax filing service. Do you qualify? 10/04/2024
International taxpayers are a recognized underserved community by the IRS, so the fact that Americans abroad weren’t included in the Direct File expansion is indefensible.
There are an estimated nine million Americans abroad (we’d be the 11th largest state if we were a state) and in 2021, 80% who filed had an Adjusted Gross Income of $100,000 or less. Over the last year, the IRS has invested in expanding Taxpayer Assistance Centers and federally funded low income and elderly tax prep services, none of which has been made accessible abroad.
Online tax prep software isn’t built with us in mind, so many turn to expensive expat tax accountants. The average cost to file domestically is $220 versus $2,000 abroad - ten times more. Some spend a whole month’s salary just on tax prep fees, the irony being that this is most often just to prove that the taxpayer has already paid (often higher) taxes in their country of residence and doesn’t owe any US tax; tax prep fees feel like a tax in and of themselves.
Taxpayers abroad often don’t have a state filing, we only have a federal filing requirement, yet the low hanging fruit of making a few small tweaks to the existing Direct File technology to make it accessible for Americans abroad has been ignored.
The absolute least the IRS should do is make Direct File accessible for low income taxpayers abroad, and they haven’t even done that.
Rebecca Lammers
Chair, Democrats Abroad Taxation Task Force
London, United Kingdom