The IRS remains open for business despite recent challenges. The agency continues to operate and assist taxpayers with their tax filing needs. One important initiative is the Alaska Volunteer Income Tax Assistance (VITA) Project.
This program trains volunteers to prepare tax returns for residents in remote Alaskan villages. Despite logistical challenges like traveling by seaplane and bringing dehydrated food, the project addresses a critical need in these underserved communities. There are concerns about potential budget cuts affecting programs like VITA.
The Trump administration has targeted various federal programs for reductions but has spared the military, Veterans Affairs, and Homeland Security. Programs supporting families dependent on tax credits like the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) could be vulnerable. To help eligible taxpayers claim credits, the IRS introduced the Direct File tool.
This online tool guides users through their tax returns and allows free filing from any device.
Alaska VITA Project training volunteers
Launched last year in 12 states, it received a 90% approval rating and is now available in 25 states.
False reports circulated on social media about the discontinuation of the Direct File program. However, the program remains operational and is guaranteed for the filing season by Treasury Secretary Scott Bessent. The Office of Personnel Management (OPM) recently offered a Deferred Resignation Program (DRP) to federal employees.
Critical IRS filing season positions are exempt from this program until May 15, 2025, including roles in Taxpayer Services, IT, and the Taxpayer Advocate Service. A recent Texas case temporarily halted the beneficial ownership interest (BOI) reporting requirements under the Corporate Transparency Act (CTA). The Supreme Court’s grant of a stay has delayed these requirements, and the Treasury may extend the compliance deadline.
Regarding deducting student loan payments, while the payments themselves are not deductible, up to $2,500 of interest paid on a qualifying student loan can be deducted. This deduction doesn’t require itemizing and covers various educational costs, albeit with some restrictions. The IRS continues to navigate challenges and changes while remaining committed to serving taxpayers during the filing season.
