IRS Direct File
Innovation of the Year
An infusion of funding from the Inflation Reduction Act paired with a team of technical experts committed to improving customer experiences led to the IRS’s creation of a long-held priority for taxpayer advocates: a free electronic filing program.
The IRS launched its Direct File pilot program last tax season for filers in 12 states, taking a cautious approach as it offered an alternative to costly filing options sold by the tax preparation industry.
“We would only proceed in opening it up to larger, more progressive audiences when we were confident in the product’s ability to scale,” Merici Vinton, deputy service owner for Direct File, recalled during a July President’s Management Agenda event in Washington, D.C. Maintaining the trust of users “is what drove the decisions on how we proceeded.”
The IRS said the pilot “started out small” and picked up “steadily increasing interest” from filers in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming. At the end of the tax season, more than 140,000 taxpayers used Direct File, and the IRS received more than $90 million in refunds and reported $35 million in balances due.
A little more than a month after tax day, the IRS announced that Direct File was here to stay, with plans to expand the now-permanent program to filers across the country. IRS Commissioner Danny Werfel said the agency’s “North Star will be improving the experience of tax filing itself and helping taxpayers meet their obligations as easily and quickly as possible.”
