IRS opens up Direct File to the public

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Interested taxpayers will have to watch the IRS website to see when the tool is open for new users.

The IRS is opening its Direct File program to the public in the 12 states piloting the service, the agency announced Wednesday. 

So far, the IRS has been focusing on more limited testing of the tool, which offers eligible taxpayers a guided means to file their taxes directly online with the government for free. 

Now, the tool will be open to eligible taxpayers for short, unannounced windows of time, according to an IRS official, as a way for the agency to test the pilot with more users. 

For those interested in using the government-developed tool to file their taxes, they’ll have to watch the Direct File website to see when it is open to new users, although if a taxpayer has already started a return when that window of time closes, they’ll be able to continue, the IRS says.

The agency has said that it expects the tool to be more widely available in mid-March. 

Taxpayers in the initial testing group of 1,200 have reported favorable experiences with the service, with some filing in less than 30 minutes, the IRS says. The pilot is available in English and Spanish, includes online customer service support and is mobile-accessible.

The tool is only available for individuals with relatively simple tax situations in 12 states. That limitation and the phased rollout are both best practices for building software, the IRS says, so that it can test and evaluate the pilot as it progresses.

“I'm actually very pleasantly surprised and impressed with the way that the rollout of the pilot has been going,” Ayushi Roy — deputy director of New America’s New Practice Lab and who was formerly on the Technology Modernization Fund’s management team — told Nextgov/FCW earlier this month, noting that agile software development that puts development and testing in a tight loop is a best practice. 

New America provided analysis included in the tax agency's congressionally mandated report on the feasibility of an IRS-run Direct File system, released last May. The IRS has been building the tool internally with the U.S. Digital Service and 18F.

“The IRS very much had a choice, like many federal agencies do, to work in private in a waterfall fashion, and go give it to a vendor and then wait for a year and the vendor would come back,” Roy said. “That's not what they did at all… It's seen as high risk, high scrutiny, and yet they chose to take this approach. And so I think if nothing else… the amount of courage that took is really commendable for the department and its administration and leadership.”

Still, the pilot has garnered pushback from some of the tax prep companies the IRS has historically worked with to give Americans free, online tax filing options. Some Republicans in Congress have also questioned the need for the pilot and authority of the IRS to build it, with over ten Republican state attorneys general arguing that the pilot is unconstitutional.