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The IRS’s Direct File: A Permanent Step in the Right Direction

By Anand Colby

The phrase “tax season” does not tend to come with a positive connotation. Indeed, Americans typically face a problematic decision every April: spend countless hours on confusing tax documents, with the potential for a mistake to have severe repercussions, or pay a fee to a private company to handle their taxes for them. For the sake of ease and because of limited options, many Americans choose the latter. In fact, the average American non-business-owning individual pays an average of $150 for help filing their annual taxes, with costs for the average business owner rising almost four-fold of that figure. For many, this presents a financial burden. Fortunately, Direct File is a real and present solution.

Since the release of the IRS’s pilot Direct File program, a select portion of the public has had greater access to free online tax filing services. Given its pilot status, the tool was tested this year in 12 states, with its future success dependent on positive user feedback. On May 30th, however, thanks to the program’s overwhelming success, the IRS declared that Direct File would become a permanent possibility for filing taxes beginning next year. This is great news for filers who are hoping to use Direct File in the future as opposed to paying companies from the private sector, and it cements Direct File into the tax system as an option that many will have moving forward.

What were the successes of the tool?

The reviews speak for themselves.

According to a report conducted by the IRS with the survey responses of 15,000 participants who tried Direct File, users had overwhelmingly positive remarks about the tool. 90% of respondents ranked their experience as Excellent or Above Average. Additionally, 90% of respondents who took advantage of Direct File’s live customer service options rated that experience as Excellent or Above Average as well. 86% of respondents, moreover, said that their trust in the IRS increased after use. Finally, when prompted about whether they would recommend this program to friends or family, participants’ responses converted into a score of +74 on a scale of -100 to 100 — an impressively high number that surpasses scores from many private financial companies.

Beyond the satisfaction behind the service and free price to use the online filing software, Direct File improved the tax-paying experience of users on many other fronts. Most respondents said their filing took less than an hour, as opposed to the thirteen hours typically spent without the service to file. On top of that, the Treasury Department calculates that users saved “$5.6 million in tax preparation fees.”

It is abundantly clear that Direct File was successful in its pilot, but the work does not stop here. All Americans deserve to have access to the tool, and we must ensure it is available beyond the select few states that participated in the 2024 pilot: Arizona, California, Florida, Massachusetts, New Hampshire, New York, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

How can I help?

Public Citizen and our partners in the Coalition for Free and Fair Filing are working to ensure Direct File will be accessible to all, nationwide. The IRS has stated it will “work with all states that want to partner with Direct File” and the IRS “[expects] several new states will choose to participate.” Oregon was the first non-pilot state to announce it will be partnering with the IRS to bring Direct File to filers in the state in 2025.

While it is great that the IRS is requesting states partner on Direct File, we are up against Big Tax Prep’s army of lobbyists who will likely fight hard to convince anyone and everyone to reject implementation of the program to protect their profits.

For this reason, we need your help making sure that the American public wants Direct File to be an option in their state. Help us (and help yourself!) by sending a message to leaders in your state urging that they partner with the IRS to make Direct File an option in 2025. You can also help get out the word on social media or simply over the dinner table. The more ways that you can help the general public to gain awareness of the possibility of Direct File being made available in your area next year. the greater the chance we all have of an easier and more just future.

Bottom line, Direct File is a step in the right direction. Although it may be off to a great start, the fight is not over until everybody can take advantage of this momentous opportunity.