IRS Direct File: A government success story

By the end of Tax Day 2025, approximately 140 million people will have filed individual tax returns. Nearly 40 million of them (30 percent) will have done so in the final two weeks of filing season alone. Each person who files will spend an average of $160 and nine hours doing so.

For U.S. taxpayers, the task of filing each year represents an additional chore on an already-long to-do list. Everyday administrative obstacles to access basic services — from piles of health insurance paperwork to long wait times to renew a driver’s license — are made worse by poor customer service tools, such as unhelpful chatbots or broken online portals. These comprise a hidden tax on daily life.

Perhaps counterintuitively, dealing with the Internal Revenue Service this year led many Americans to experience a rare breath of fresh air. In just the last two years, the IRS developed a program that stands out as a model of how the federal government can eliminate these pain points and make life easier.

Direct File, an online program that allows taxpayers to file directly with the IRS for free, has been a resounding success. Most users were able to complete their return in under an hour, and according to provisional data provided to us by Code for America, 94 percent of users said they preferred Direct File to previously used methods. Many reported it took just under seven minutes to finish their state filing, which is synced with the Direct File tool, after completing their federal return.

Expanding Direct File is an opportunity to invest in a program that lowers costs and saves time for families. Treasury Secretary Bessent has committed to keeping Direct File — which is available in 25 states this year — operational through the end of filing season. But President Trump and Elon Musk’s gutting of IRS staff and funding are counterproductive to keeping the popular program running, much less to expanding it to cover more taxpayers in the future.

Why would such a common-sense and popular program be discontinued? For decades, private companies cornered the market for tax preparation, forcing taxpayers to use expensive software for a task that should — and could — be simple and free. Using that software is costly in both time and money. American taxpayers spend a collective $31 billion and 1.7 billion hours annually filing their taxes. Millions more skip filing altogether — and so forgo tax credits for which they might be eligible — because of the costs of filing.

The tax preparation industry, dominated by just a handful of giant companies like Intuit and H&R Block, has spent decades fighting reforms to make tax filing free and easy. Using TurboTax or H&R Block this filing season could set you back over $200. These firms have every incentive to keep the process burdensome so they can market their expensive, proprietary software as a necessary shortcut for taxpayers with no alternatives. In fact, in 2023, TurboTax’s parent company paid a $141 million settlement after they intentionally tricked low-income taxpayers into paying for services they had told the IRS they would provide for free. That same year, Intuit took in more than $14 billion in revenue and paid its CEO a whopping $27 million.

As millions of Americans scramble to file their taxes today ends, a task that usually costs taxpayers time, money and energy has been made free and easy with Direct File. While Trump and Musk are undermining customer service across the federal government by indiscriminately slashing staff and programs, Direct File is a powerful counterexample.

Instead of gutting IRS staff and customer-service capability, Trump and Musk should expand Direct File to cover all states and tax situations. The program’s early success and broad popularity prove that well-designed public tools can ease administrative headaches, reduce costs for consumers and actually improve people’s day-to-day experiences with the government.

Chad Maisel is a former special assistant to the president in the Biden administration and a policy fellow at Groundwork Collaborative. Emily DiVito is a former Treasury official and senior advisor for economic policy at Groundwork.