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Maine joins IRS Direct File

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The Treasury Department and the Internal Revenue Service said Tuesday that Maine will be the latest state to join the IRS Direct File free tax prep system for filing season 2025. 

More than 120,000 Maine taxpayers will be eligible to use the free online filing tool next filing season. 

The free online filing system was pilot tested last tax season in 12 states, and the IRS announced plans in May to make the program permanent. It invited all 50 states, as well as the District of Columbia, to join the program. The dozen states where it was available this filing season include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming. 

The Treasury and the IRS have been working with interested states to offer Direct File to their taxpayers with Maine becoming the latest state to join, following Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina and Wisconsin. 

“Thanks to President Biden’s Inflation Reduction Act, more than 120,000 Maine taxpayers will be able to file their taxes online for free, directly with the IRS this coming Filing Season. Direct File will save Mainers time and money and help ensure they receive the tax benefits they are owed,” said U.S. Treasury Secretary Janet Yellen in a statement. “After a successful pilot this filing season, we are pleased to expand the program as a permanent offering and welcome Maine as the latest new state to offer this free option to taxpayers.” 

Treasury Secretary Janet Yellen at a House Ways and Means Committee hearing in Washington, D.C.
Treasury Secretary Janet Yellen at a House Ways and Means Committee hearing in Washington, D.C.

Tierney L. Cross/Bloomberg

“Thanks to our new partnership with the federal government, beginning next January, Maine people will have the ability to file their Federal taxes online for free, building on our longstanding success in allowing Maine people to file their State taxes online for free,” said Maine Governor Janet Mills in a statement. “This new IRS Direct File tool will streamline the process of filing taxes and save Maine people valuable time and money. I thank President Biden and Vice President Harris for the Inflation Reduction Act, which made this exciting new service possible.”

After using Direct File to file their federal return for free, Maine residents will be connected with the Maine Tax Portal to file their state return for free. The Maine Revenue Services plans to work with the IRS on the goal of integrating Maine Tax Portal and Direct File by 2026 so taxpayers can easily complete their state taxes by transferring their federal return information over from Direct File.

“When tax season rolls around, with it comes the stress of having to navigate the complicated, time-consuming, and expensive federal filing process,” said Senator Angus King in a statement. “When we designed the tax provisions in the Inflation Reduction Act, we wanted to save taxpayers their time and money, simplify filing, and help ease the chokehold third-party tax preparers or software companies have on Maine people. This is a long overdue step that will build on Maine’s already successful free state tax filing program, and will be available to the 120,000 Maine people with simple filings – to keep more hard-earned dollars in people’s pockets.”

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Acting IRS commissioner reportedly replaced

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Gary Shapley, who was named only days ago as the acting commissioner of the Internal Revenue Service, is reportedly being replaced by Deputy Treasury Secretary Michael Faulkender amid a power struggle between Treasury Secretary Scott Bessent and Elon Musk.

The New York Times reported that Bessent was outraged that Shapley was named to head the IRS without his knowledge or approval and complained to President Trump about it. Shapley was installed as acting commissioner on Tuesday, only to be ousted on Friday. He first gained prominence as an IRS Criminal Investigation special agent and whistleblower who testified in 2023 before the House Oversight Committee that then-President Joe Biden’s son Hunter received preferential treatment during a tax-evasion investigation, and he and another special agent had been removed from the investigation after complaining to their supervisors in 2022. He was promoted last month to senior advisor to Bessent and made deputy chief of IRS Criminal Investigation. Shapley is expected to remain now as a senior official at IRS Criminal Investigation, according to the Wall Street Journal. The IRS and the Treasury Department press offices did not immediately respond to requests for comment.

Faulkender was confirmed last month as deputy secretary at the Treasury Department and formerly worked during the first Trump administration at the Treasury on the Paycheck Protection Program before leaving to teach finance at the University of Maryland.

Faulkender will be the fifth head of the IRS this year. Former IRS commissioner Danny Werfel departed in January, on Inauguration Day, after Trump announced in December he planned to name former Congressman Billy Long, R-Missouri, as the next IRS commissioner, even though Werfel’s term wasn’t scheduled to end until November 2027. The Senate has not yet scheduled a confirmation hearing for Long, amid questions from Senate Democrats about his work promoting the Employee Retention Credit and so-called “tribal tax credits.” The job of acting commissioner has since been filled by Douglas O’Donnell, who was deputy commissioner under Werfel. However, O’Donnell abruptly retired as the IRS came under pressure to lay off thousands of employees and share access to confidential taxpayer data. He was replaced by IRS chief operating officer Melanie Krause, who resigned last week after coming under similar pressure to provide taxpayer data to immigration authorities and employees of the Musk-led U.S. DOGE Service. 

Krause had planned to depart later this month under the deferred resignation program at the IRS, under which approximately 22,000 IRS employees have accepted the voluntary buyout offers. But Musk reportedly pushed to have Shapley installed on Tuesday, according to the Times, and he remained working in the commissioner’s office as recently as Friday morning. Meanwhile, plans are underway for further reductions in the IRS workforce of up to 40%, according to the Federal News Network, taking the IRS from approximately 102,000 employees at the beginning of the year to around 60,000 to 70,000 employees.

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Accounting

On the move: EY names San Antonio office MP

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Carr, Riggs & Ingram appoints CFO and chief legal officer; TSCPA hosts accounting bootcamp; and more news from across the profession.

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Accounting

Tech news: Certinia announces spring release

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Certinia announces spring release; Intuit acquires tech and experts from fintech Deserve; Paystand launches feature to navigate tariffs; and other accounting tech news and updates.

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