IRS Direct File Pilot Exceeds Usage Goal, Receiving Positive User Ratings and Saving Taxpayers Money

140,803 Taxpayers Filed Their Taxes Directly with the IRS for Free as users claimed more than $90 million in refunds and saved an estimated $5.6 million in tax preparation fees

WASHINGTON – Today, the U.S. Department of the Treasury and Internal Revenue Service (IRS) announced key data on the performance of the IRS’s Direct File Pilot showing that the program surpassed the Treasury’s goal of 100,000 users, received positive user ratings, and saved taxpayers money. The Direct File pilot program was made possible by President Biden’s Inflation Reduction Act and allowed taxpayers in 12 states with simple taxes to file for free, directly with the IRS.

The IRS designed the pilot to follow best practices for launching a new technology platform – start small, make sure it works, then build from there. After successful testing, Direct File opened to broader access mid-way through the filing season. Even so, 140,803 taxpayers successfully filed returns using Direct File, with users reporting a high degree of user satisfaction. Direct File users claimed more than $90 million in refunds and saved an estimated $5.6 million in tax preparation fees on their federal returns alone. The 12 states that participated in this year’s pilot either had no state income tax or a free state filing tool similar to Direct File. Usage was robust in both categories of states.

“The IRS’s Direct File pilot enabled more than 140,000 taxpayers to file their taxes for free, saving participants time and money,” said Deputy Secretary of the Treasury Wally Adeyemo. “Thanks to President Biden’s Inflation Reduction Act, the IRS created a program that helped taxpayers access $90 million in refunds, achieved top notch customer service ratings and provided the data and lessons necessary to determine next steps.” 

The IRS also collected information on user experiences with Direct File. In a GSA Touchpoints survey of more than 11,000 Direct File users, 90% of respondents ranked their experience with Direct File as “Excellent” or “Above Average.” Direct File received a Net Promoter Score (NPS) of +74, an exceptionally high rating.

Direct File also allowed the IRS to test a large-scale live-chat feature. Direct File customer service representatives (CSRs) handled tens of thousands of chats with an average wait time of one minute and an Average Handle Time of 9 minutes. 90 percent of survey respondents who used Customer Support rated their experience as excellent or above average.

A majority of survey respondents who filed taxes in the prior year reported having to pay to prepare their taxes last year. Among survey respondents, 47 percent of users paid to file their taxes last year and 16 percent did not file last year at all. 

Foundational technology and product development costs for the IRS were $10.5 million, and Direct File’s operational costs – including customer service, cloud computing and user authentication – were just $2.4 million. To build and run the pilot, the IRS also engaged the U.S. Digital Service (USDS) and costs associated with their work are not included.

The Treasury and IRS will continue to analyze results of the pilot before deciding on the future of Direct File in the coming weeks.

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