Despite DOGE and Detractors, IRS Direct File Must Keep Growing

Direct File, the IRS’s free public tax preparation software, is a model of what government service can be. Policymakers must continue and expand the program in the face of likely opposition.

Piloted last year, Direct File is now available to about 30 million tax filers in 25 states. Pilot participants reported filing their federal taxes in less than an hour, with a seamless system to file state taxes as well.

No wonder most of last year’s Direct File users gave the system positive reviews—about 90% of surveyed users scored their experience as “above average” or “excellent.”

Effective government services aren’t just important for the immediate benefits they provide. They remind people of the value of government agencies. Eighty-six percent of surveyed Direct File users said the program increased their trust in the IRS.

Both Biden and Trump voters were similarly enthused about their Direct File pilot experiences, according to the survey data. In this highly polarized era, it’s essential to help everyone feel their shared stake in the US government.

The IRS this year moved forward on data importation, one of the major requests from pilot participants. For far too long, federal income tax filing has been like an unnecessary and expensive quiz. Filers must answer questions the IRS can already answer, with potentially serious penalties for making a mistake.

Tasking the government with tax filing has long been a policy goal for elected officials across the political spectrum, from President Ronald Reagan to Sen. Elizabeth Warren (D-Mass.) This year, Direct File users can finally import some of their tax information that the IRS already has on hand.

Plenty of individuals will continue to file their taxes using a private preparer. Direct File is a public option, so it isn’t mandatory for anyone. And it’s still in development, as those who earn income from cash tips or gig work can’t use it yet. There also are income limits for users and limits on the kinds of credits and deductions one can claim within the Direct File system.

That means Direct File has room to grow. The program should be extended to more states and tax filers. Future iterations could make Direct File available to those using medical savings accounts or withdrawing funds from their individual retirement accounts.

Data importation can also expand. Economists have estimated that the IRS has the information required to pre-fill the taxes of up to half of all individual tax filers.

Sadly, a program being effective and popular doesn’t ensure its survival in today’s Washington. Direct File faces two obstacles to permanence: the lobbying efforts of the for-profit tax industry and the destructiveness of Elon Musk’s Department of Government Efficiency.

For-profit tax preparers held off free public tax filing for 20 years, and their allies in Congress continue to push for the program’s elimination. The Trump administration is attempting to vastly shrink the IRS workforce and the General Services Administration team that was involved in Direct File’s design—though these actions are facing serious and often successful challenges in court.

Direct File remains an excellent option for tax filers this year, particularly given the likelihood that the IRS’s workforce instability increases waits for refunds. Individuals should file their taxes as soon as possible and check if Direct File is right for them. And policymakers should ensure the program not only remains in operation next year but also reaches more states and filers.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Vanessa Williamson is a senior fellow at the Urban-Brookings Tax Policy Center and a senior fellow in governance studies at the Brookings Institution.

Ellis Chen, a research assistant in the Brookings Institution’s governance studies program, contributed to this article.

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