The Internal Revenue Service (IRS) has submitted a report to Congress evaluating the feasibility of implementing a Direct File option for taxpayers. The report, required by the Inflation Reduction Act, explores the potential of offering a free, voluntary, IRS-operated electronic filing system called “Direct File.”
The report states that many taxpayers are interested in using a free IRS-provided tool for tax preparation and filing, and the IRS has the technical capability to deliver a Direct File program. However, it also highlights that implementing such a program would require sustained budget investment and careful management of operational complexity.
The report focuses on three areas: taxpayer opinions, cost, and feasibility. It includes an analysis conducted by an independent third party as mandated by the statute. It outlines both the potential benefits and challenges associated with the IRS implementing a Direct File program.
IRS Commissioner Danny Werfel emphasizes the agency’s commitment to improving taxpayer services and mentions that a Direct File program has been discussed as an option for enhancing the taxpayer experience. The report recommends starting with a limited pilot program in the 2024 filing season to assess operational factors and gather further information on customer support, technology needs, and overcoming potential challenges.
The IRS conducted the report based on data from its Taxpayer Experience Survey (TES), which gathered input from thousands of taxpayers. It also incorporated findings from a survey conducted by the MITRE Corporation and conducted user research and usability testing using an internal prototype to better understand taxpayer perspectives.
The report includes an independent analysis by New America and Professor Ariel Jurow Kleiman on the Direct File concept. The IRS plans to engage with stakeholders in the future regarding this topic. Further details on the Direct File pilot will be made available in the coming months.
Here is the original article on the IRS site.
