With tax season finally over, the IRS is touting the success of its Direct File pilot after officially closing the new service that helped over 140,000 taxpayers file their Federal tax returns.
Direct File was an online tool that allowed taxpayers with simple tax situations in 12 states to file their taxes directly with the IRS. Across the 12 pilot states, the IRS said taxpayers claimed over $90 million in tax refunds and reported $35 million in tax balances due.
“From the very beginning of the Direct File pilot, we wanted to test new ways to give taxpayers an easy, accurate and free way to file their taxes online directly with the IRS,” said IRS Commissioner Danny Werfel.
“We saw a strong response from the pilot, and Direct File’s users generally found it fast and easy to use. This is an important part of our effort to meet taxpayers where they are, give them options to interact with the IRS in ways that work for them and help them meet their tax obligations as easily and quickly as possible,” he added.
As part of the pilot, the IRS surveyed more than 11,000 Direct File users and found that 90 percent of them ranked the service to be “Excellent” or “Above Average.” Additionally, 86 percent of users stated that their trust in the IRS has increased.
“Direct File provided important lessons for us,” Werfel said. “A team of experts from across government worked together – alongside private sector partners with critical expertise – to build and test Direct File. This team designed and built Direct File from the beginning with taxpayers’ help, and we worked with taxpayers to refine the system throughout the pilot.”
According to the IRS, the total cost to run the pilot was $24.6 million, with $2.4 million in operational costs such as customer service integration, cloud computing, and user authentication.
While the future of the program as a permanent tool at the IRS is still to be determined, Werfel noted that the IRS will analyze data collected during the program and release a report “in the coming days” about its costs, benefits, and possible future enhancements.
The IRS said it expects to announce a decision about the future of Direct File “later this spring.”
“We will consult a wide variety of stakeholders to understand how lessons from Direct File can help us improve the entire tax system as well as assess next steps,” Werfel said.
