Business
New IRS Direct File program now available in California
If you’re a California resident and haven’t done your federal tax return for 2023, you now have another, more user-friendly option online: the free Direct File service from the IRS.
It’s not for everyone, however. Instead, it’s aimed mainly at people with very simple annual tax returns, which the Treasury Department said amounts to about 1 of every 3 taxpayers.
The tax agency launched the Direct File service in January on an extremely limited basis to make sure its online systems were up to the task. That changed Monday, when the IRS announced that Direct File was available to all taxpayers in California, Arizona, Nevada and nine other states.
Think of Direct File as the IRS’ alternative to the free online tax-filing programs from TurboTax and H&R Block. It provides step-by-step guidance for filling out your tax forms, filing them and either paying any amount you might owe or collecting your refund.
The program’s question-and-answer approach means you won’t have to know which forms to fill out or where on the forms to enter your information. Instead, the program will handle those details for you.
The IRS already works with several tax-prep companies to offer lower-income taxpayers a free online tax return service called Free File. What makes Direct File different is that there’s no middleman and no income limit for participants — anyone can use it, provided that their tax returns use only the most basic forms.
Specifically, the program will work only for taxpayers whose income is limited to wages reported on a W-2, retirement benefits from Social Security or the Railroad Retirement Board, unemployment benefits or interest income of $1,500 or less. That means if you’re a self-employed person, a business owner, a contractor or a gig worker, or if you have income from a partnership or trust, Direct File isn’t for you.
The Treasury Department estimates that 19 million people in the 12 participating states are eligible to use Direct File this year and that several hundred thousand people will do so.
Direct File also allows you to claim only a truncated list of credits and deductions: the Earned Income Tax Credit for low-income workers, the credits for children and other dependents, the standard deduction and deductions for student loan interest payments and educators’ classroom and professional development expenses. If you’re able to claim other credits and deductions, such as those for foreign taxes paid, child care or retirement savings, or if you cut your tax bill by itemizing deductions (for example, if you have sizable medical expenses), Direct File would not be a good choice for you.
One other caution: The IRS says Direct File will be available only until April 15, when most Californians’ 2023 returns are due. The agency pushed the deadline for taxpayers in San Diego County back to June 17 in response to the federal disaster declaration in that county.
Direct File runs online only; you’ll need a smartphone, tablet or computer to access it. And to get started, you’ll need to prove to the IRS that you are who you say you are.
The only way to do that this year will be to use the identity verification service ID.me, which takes a scan of your government-issued picture ID, such as your driver’s license or passport, then uses facial-recognition software to match your image from a live chat session or a new selfie against the stored photo. ID.me has raised concerns among some critics, who say it poses too great a threat to privacy and security.
Once you’ve established your identity, the program will check your eligibility, then guide you as you enter information about your income, credits and deductions. You don’t need to download any software, the IRS said; instead, your entries will be saved online, and you’ll be able to pause and resume later without having to start over.
Direct File has a live chat feature to help taxpayers with questions, but it’s not a source of free tax advice.
“IRS customer service representatives can provide technical support and provide basic clarification of tax law related to the tax scope of Direct File,” the agency said in a release. “Questions related to issues other than Direct File will be routed to other IRS customer support, as appropriate.”
The Direct File service hasn’t been integrated into California’s tax filing system yet, so you won’t be able to transfer your federal information seamlessly to your state return. The state Franchise Tax Board offers a free online return filing system called CalFile whose restrictions are similar to those in Direct File, so if you’re eligible for the latter, you’re probably able to use the former.
If you’re entitled to a refund, tax experts say, you should file your return as soon as possible. Otherwise, you’re just making an interest-free loan to the federal government.
Business
FCC takes aim at talk shows in fight over ‘equal time’ rules for politicians
The Federal Communications Commission is taking aim at broadcast networks’ late-night and daytime talk shows, including ABC’s “The View,” which often feature politicians as guests.
On Wednesday, the FCC’s Media Bureau issued a public notice saying broadcast TV stations would be obligated to provide equal time to an opposing political candidate if an appearance by a politician falls short of a “bona fide news” event.
For years, hosts of “The View,” ABC’s “Jimmy Kimmel Live!” and CBS’ “The Late Show with Stephen Colbert,” have freely parried with high-profile politicians without worrying about being subjected to the so-called “equal time” rule, which requires broadcasters to bring on a politician’s rival to provide balanced coverage and multiple viewpoints.
With the new guidance, the FCC appears to take a dim view of whether late-night and daytime talk shows deserve an exemption from the “equal time” rules for stations that transmit programming over the public airwaves. The move comes amid FCC Chairman Brendan Carr’s campaign to challenge broadcast networks ABC, CBS and NBC in an effort to shift more power to local broadcasters, including conservative-leaning television station groups such as Nexstar Media Group and Sinclair Broadcast Group.
Since becoming chairman of the FCC a year ago, the President Trump appointee has been critical of CBS, NBCUniversal and Walt Disney Co. He launched investigations into Disney and Comcast’s diversity hiring practices and reopened a “news distortion” probe into CBS’ edits of a 2024 “60 Minutes” interview with then-Vice President Kamala Harris after Trump sued the network for more than $10 billion.
Carr withheld approval of CBS parent Paramount’s sale to billionaire scion David Ellison’s Skydance until after Paramount agreed to pay Trump $16 million to settle the suit, which several legal observers had deemed frivolous.
During a social media storm over Kimmel’s comments in the wake of the killing of conservative activist Charlie Kirk in September, Carr suggested the FCC might use its regulatory hammer over ABC parent Walt Disney Co. if the Burbank giant failed to take action against Kimmel. “We can do this the easy way or the hard way,” Carr said at the time.
The FCC oversees television station broadcast licenses, and those stations have obligations to serve the public interest.
On Wednesday, the FCC rolled out the new guidance aimed at late-night talk shows and “The View,” saying there’s a difference between a “bona fide news interview” and partisan politics.
“A program that is motivated by partisan purposes, for example, would not be entitled to an exemption under longstanding FCC precedent,” the Media Bureau said in its unsigned four-page document.
The bureau encouraged broadcasters to seek an opinion from the FCC to make sure their shows were in compliance — an advisory that will likely raise anxiety and potentially prompt some TV station groups to scrutinize shows that delve deeply into politics.
ABC, CBS and NBC declined to comment.
Since Trump returned to the White House a year ago, the FCC has stepped up its involvement in overseeing content — a departure from past practice.
Trump has made no secret of his disdain for Kimmel, Colbert, NBC comedian Seth Meyers and various hosts of “The View.”
Recently, “The View” featured former U.S. Rep. Marjorie Taylor Greene, once a Trump acolyte who has become a fierce critic of the president.
Daniel Suhr, president of the conservative Center for American Rights, applauded the FCC move in a statement.
“This important action puts Hollywood hosts and network executives on notice — they can no longer shower Democrats with free airtime while shutting out Republicans,” Suhr said. The organization has lodged several complaints with the FCC about alleged media bias.
Anna M. Gomez, the lone Democrat on the three-person commission, quickly blasted the move.
“For decades, the Commission has recognized that bona fide news interviews, late-night programs, and daytime news shows are entitled to editorial discretion based on newsworthiness, not political favoritism,” Gomez said. “This announcement therefore does not change the law, but it does represent an escalation in this FCC’s ongoing campaign to censor and control speech.”
“The 1st Amendment does not yield to government intimidation,” she said. “Broadcasters should not feel pressured to water down, sanitize or avoid critical coverage out of fear of regulatory retaliation.”
The precedent was established in 2006, when the FCC determined that then-NBC late-night host Jay Leno’s “Tonight Show” interview with actor Arnold Schwarzenegger, who announced his bid for California governor, was a “bona fide” news event, and thus not subject to the FCC rule.
The FCC said that station groups need not rely on that 2006 decision because the agency “has not been presented with any evidence that the interview portion of any late night or daytime television talk show program on air presently would qualify” for such an exemption.
The FCC’s guidance does not apply to cable news programs — only shows that run on broadcast television, which is subject to FCC enforcement actions.
Business
Fight over L.A. County’s oldest cafe boils over in trademark claims, court filings
After the longest-operating cafe in L.A. County announced in late December that it would shut down after 139 years, customers of the Original Saugus Cafe began buying up its branded hats, T-shirts, mugs and other merchandise.
When the merch sold out, some took to filching from the tables: glassware, salt and pepper shakers, and even utensils.
To Jessie Mercado, 31, and her father, Alfredo — who has owned the beloved cafe in Santa Clarita for 30 years — it was amusing and sweet that many held the establishment so close to their hearts that they wanted to take pieces of it home with them.
A sign posted to the Saugus Superette, the liquor store adjacent the Original Saugus Cafe, promises the reopening of the restaurant.
(Jenn Harris / Los Angeles Times )
But a property manager who took over handling their lease in recent months saw it differently. He left an angry voicemail for her 59-year-old father, reviewed by The Times, telling him to “get the Godd— s— back,” or he would sue.
Customers of the Original Saugus Cafe didn’t have long to mourn the loss of the landmark. The restaurant, which closed on Jan. 4, has already reopened under new management. Meanwhile, behind the scenes, a dispute over the cafe’s ownership has boiled over into a lawsuit as the Mercados insist that they were pushed out.
For decades, Mercado’s father said he had a friendly relationship and verbal lease agreement with the property owner, Hank Arklin Sr., a former state Assembly member who owned several commercial spaces in the area.
But difficulties arose after Arklin died at the age of 97 in August, the Mercados said, and they began dealing with Larry Goodman, who handles properties on behalf of the Arklin family’s company, North Valley Construction.
The Mercados alleged in a lawsuit filed last week that Goodman, North Valley Construction and Arklin’s wife, Louise, had treated the family poorly, tainted the brand, ignored their legal claim to the business and equipment so they would abandon the restaurant.
Despite the ongoing legal challenge, the cafe reopened on Monday at 5 a.m. under new owner Eduardo Reyna and with a slightly different name: Saugus Restaurant. Much of the furniture appears to have remained the same, along with menu items and even some of the employees.
People wait in line to eat at the Original Saugus Cafe during what was thought to be its last day of business after nearly 140 years in Saugus.
(Juliana Yamada / Los Angeles Times)
“People think we lied to them [about shutting down]. That it was a publicity front. I want them to know we were scammed into this,” Mercado said. “It’s sad it had to go down this way.”
Steffanie Stelnick, an attorney representing the Mercados, said that for the new owner and landlord “to open up and run [the cafe] in the same location, representing it as the same business without purchasing it or without permission” is effectively stealing.
Stelnick said she planned to amend the lawsuit to include Reyna.
Reyna did not respond to a phone call request for comment.
Goodman did not respond to multiple phone calls and messages from The Times requesting comment. Louise Arklin also did not respond to requests for comment.
But earlier this month in an interview with the Santa Clarita Valley news outlet the Signal, Goodman disputed that the Mercado family owned the business and said the father had wavered about keeping the restaurant going.
“They don’t have nothing to sell. I own everything,” Goodman said. “We own the cafe. We own the building. The stove. The dishes. The forks. We own everything in there.”
The cafe, in a long, narrow building, was beloved by Santa Clarita residents and was locally renowned for its long-running operation, its cameos in various films and television shows, and visits by Hollywood stars such as Frank Sinatra and John Wayne.
Mercado said her family hadn’t wanted to close. They wanted to continue supporting the 17 employees who worked there. But, she said, they entertained the possibility of selling the business if the right offer came along. Dealings with Goodman, however, had felt hostile and left her father feeling “humiliated” and like they had no option but to leave.
A sign on the door posted in late December announced the cafe’s closure, noting that the “decision was not made lightly.”
On its last day of operation, the line stretched down the block. Among customers saying their goodbyes was Charlane Glover, who shared countless Sunday morning breakfasts with her husband there before his death.
“I can’t imagine it being gone,” said Glover, who waited for over an hour for a table for her and her granddaughter. “We are losing all of our history.”
Mercado’s father got a shock the next morning, his daughter said, when he arrived to pack up only to find the locks had been changed and a sign posted saying the cafe would be “reopening under new ownership soon!”
Alfredo Mercado had started at the restaurant busing tables and washing dishes, she said, working his way up the ladder to bartender and cook positions to eventually acquire ownership of the cafe and its name in 1998. Her father is the sole name listed on the LLC.
Stelnick, the family’s attorney, wrote in a Jan. 6 cease-and-desist letter to Goodman that he made a “wrongful attempt” to take her client’s business and that his alleged “ongoing threats and force have already caused significant damage.”
The Mercados filed suit Jan. 14 in Los Angeles County Superior Court and are pursuing damages — including the taking of their personal property — of at least $500,000.
The complaint alleges that, in August after Arklin’s death, Goodman pressured Mercado’s father to sign a lease that stated that, in addition to the premises, all manner of appliances and utensils were under the purview of the rental agreement — including “kitchen equipment, booths, counters, stools, chairs, registers, utensils, pots, plates, cutlery, and other cooking & mechanical systems” — even though the Mercados had purchased and maintained those items, the lawsuit argued. Goodman, the lawsuit alleged, had indicated the Mercados would not be able to remain on the property as tenants if they did not sign.
At the end of August, the Arklin family’s company, North Valley Construction, submitted trademark applications for the names “Saugus Café,” “The Original Saugus Café” and “Saugus Café1.”
The lawsuit said the filing of applications showed the property owner was pursuing a “confusingly similar” name and that infringement on the Mercados’ business was thus “willful, deliberate, and malicious.”
Mercado said her father hadn’t acted sooner because he didn’t understand the extent of his claim over the business.
“We just didn’t know our rights,” Mercado said.
Staff photographer Juliana Yamada contributed to this report.
Business
Helped by ‘Stranger Things’ finale, Netflix lands strong fourth quarter
Netflix reported a strong finish to its fiscal year Tuesday, with revenue climbing 18% in the fourth quarter to just over $12 billion compared with a year ago.
The streaming giant’s profits during the same period reached $2.4 billion, or 56 cents a share, up from $1.87 billion, or 43 cents a share, a year earlier, the company reported.
The results were slightly ahead of Wall Street estimates and driven by growth in the company’s advertising business, higher prices and increases in paid memberships, which surpassed the 325-million mark, Netflix said in a letter to shareholders.
Netflix said total engagement on its platform, meaning the amount of time its users spent watching content, rose 2% in the second half of the year.
The company got a big boost in the quarter from the final season of its hit series “Stranger Things,” among other popular shows, documentaries and movies, including Guillermo del Toro’s “Frankenstein” and “Wake Up Dead Man: A Knives Out Mystery.”
Netflix said “KPop Demon Hunters” broke records as its most-watched movie with 482 million views in the last half of 2025. Users wanted to sing along with “KPop Demon Hunters Lyric Videos,” which scored 32 million views.
The streamer’s top series was the second season of “Wednesday,” which pulled in 124 million views. The first season of the series also popped with 47 million more.
For the year, the Los Gatos-based company reported revenue of $45.2 billion, up 16% from 2024.
The latest earnings report follows news earlier Tuesday that Netflix modified its offer to buy Warner Bros. Discovery, making it an all-cash bid. The companies agreed on the deal, valued at $82.7 billion, in December.
The agreement between the most successful streaming platform and the storied movie studio behind “Casablanca,” Harry Potter and “Batman” has its share of supporters and detractors. Netflix shares have been on a decline since the December announcement.
“Investors will ponder whether Netflix becoming HBO faster than HBO became Netflix serves their interest,” said Emarketer senior analyst Ross Benes. “So far, markets have not responded kindly to the acquisition.”
Rival bidder Paramount has made clear it will continue its hostile takeover attempt for Warner Bros., despite some setbacks. It has given the company’s investors a Jan. 21 deadline to tender their shares. It remains to be seen whether Paramount opts to extend that deadline.
Warner Bros. has rejected Paramount’s overtures multiple times in recent months, while expressing its preference for its deal with Netflix.
The results were released after markets closed. Netflix shares ended the day at $87.05, down 1% on Tuesday.
Times staff writer Meg James contributed to this report.
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