The Success of IRS Direct File Program

As Tax Day 2025 approaches, around 140 million individuals are expected to submit their tax returns. Of these, nearly 40 million (30 percent) will do so during the final two weeks of the filing season. On average, each person filing will spend nine hours and $160 on the process.
For American taxpayers, filing taxes annually is an additional task to an already long list of responsibilities. Everyday hurdles to accessing basic services add to the burden faced by taxpayers, with issues like health insurance paperwork and long wait times for license renewals. These challenges represent an unseen tax on daily life.
Interestingly, navigating the Internal Revenue Service this year has provided a positive experience for many Americans. The IRS has developed the Direct File program, which serves as a model for optimizing federal government services and making life simpler.
Direct File, an online platform that allows free filing directly with the IRS, has been highly successful. Many users completed their tax return in under an hour, with 94 percent expressing a preference for Direct File over other methods. Users reported that it took around seven minutes to complete their state filing, which is synchronized with the Direct File tool after finishing their federal return.
Expanding Direct File presents an opportunity to invest in a program that reduces costs and saves time for families. Despite the commitment from Treasury Secretary Bessent to keep Direct File operational through the filing season in 25 states, there are concerns about its future due to staff and funding reduction by President Trump and Elon Musk.
The termination of Direct File, a popular and practical program, comes as a surprise. For years, private tax preparation companies have monopolized the market, compelling taxpayers to purchase expensive software for a task that should be simple and free. The tax preparation industry, dominated by a few large companies like Intuit and H&R Block, has resisted reforms to streamline the filing process. Using their software can cost over $200, which is significant both in terms of money and time.
As millions of Americans complete their tax filings, Direct File offers a free and straightforward alternative to traditional tax software. The success and widespread approval of Direct File underscore the benefits of well-designed public tools that streamline administrative processes and improve the public’s interactions with the government.