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Tax & RevenueSimplificationPositive

IRS Direct File Pilot

Internal Revenue Service / US Digital Service · United States (12 pilot states) · 2024

Summary

The IRS Direct File Pilot is the first time the US federal government has directly competed with commercial tax-preparation software at scale. The intervention is simple in concept (a government-built free filing system, available to eligible taxpayers) but unusual in implementation: most OECD countries operate similar systems, but the United States has historically deferred to a 'public-private partnership' that has resulted in widely-criticized commercial dominance, paywall-driven upsells, and an estimated $11 billion in unnecessary fees paid annually by US taxpayers. The 2024 pilot evaluated whether a government system could match commercial UX, complete returns accurately, and produce meaningful savings — and the answer was yes on all three counts. What makes the case interesting from a civic-experiment perspective is the political economy: the empirical evidence was unambiguous, but the political resistance is substantial enough that the program's future depends on each administration's willingness to defend it. As of the 2025 expansion, Direct File represents one of the most consequential government-operated digital services launches in recent US history, and the evidence on its impact will continue to accumulate.

Research question

"Can a free, government-operated direct tax-filing system match commercial filing products on user experience, accuracy, and completion rate — and reduce the time and cost burden of federal tax filing for typical Americans?"

Methodology

Intervention

The IRS launched a free, mobile-friendly, government-operated direct e-filing system for federal tax returns. Eligible filers — those with simple tax situations (W-2 income, standard deduction, EITC, CTC) in 12 pilot states — could file directly with the IRS without paying for or being upsold by commercial tax-prep software. Available in English and Spanish, mobile-optimized, with embedded help and live chat support.

Assignment

Quasi-experimental rollout — eligibility limited by state and tax-situation complexity; comparison to commercial-filer benchmarks and to non-eligible filer behavior in same states

Sample size

Approximately 140,000 returns filed through Direct File in the 2024 pilot; 423,000 attempted to use the system; eligible population of roughly 19 million filers in the 12 pilot states

Primary outcome

Completion rate among users who started a return; user satisfaction; time to complete filing; estimated cost savings to filers vs. commercial alternatives

Effect estimate

90%+ user-satisfaction rating on post-filing survey; users reported saving an average of $160 in filing fees and approximately 30 minutes vs. commercial alternatives; ~78% completion rate among users who started a return. Independent analysis by the Government Accountability Office estimated annual potential savings of $11 billion if scaled nationally.

Decision

Following pilot success, the IRS announced expansion of Direct File to all 50 states for the 2025 tax season and to additional tax situations (HSA contributions, retirement income, more deductions). The program has faced ongoing political opposition from commercial tax-prep industry incumbents and from policymakers who view government-operated filing as inappropriate. Ongoing — final scope depends on continued appropriations and administration priorities.

Result

Positive

90%+ user-satisfaction rating on post-filing survey; users reported saving an average of $160 in filing fees and approximately 30 minutes vs. commercial alternatives; ~78% completion rate among users who started a return. Independent analysis by the Government Accountability Office estimated annual potential savings of $11 billion if scaled nationally.

Evidence strength

Moderate

Quasi-experimental design; causal interpretation requires care.

Replication status

Open for replication

Institution

Internal Revenue Service / US Digital Service

Location

United States (12 pilot states)

Year

2024

Policy area

Tax & Revenue

Mechanism

Simplification

Featured in evidence syntheses

Other trials of this mechanism

Cite this entry

Internal Revenue Service / US Digital Service. (2024). IRS Direct File Pilot. The Experiment Society Registry. Retrieved from https://www.experimentsociety.org/registry/irs-direct-file-pilot (primary report: https://www.irs.gov/about-irs/strategic-plan/direct-file-pilot-report)

Citation network

Cited by 2 other entries in the registry

Cross-references

Adjacent experiments — same domain, parallel pilots, or alternative mechanisms.

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Open for replication

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