IRS Direct File

Filing Season 2025 Report

May 13,2025
Table of Contents
Table of Contents 2
Executive Summary 4
Introduction 6
What is Direct File? 6
Background 6
About this report 7
Expanding Reach 8
What's new? 8
Eligibility increased to 32 million 8
Direct File's approach 9
Future opportunities 11
States 12
What's new? 12
Background 12
Enriching the State API 13
Benefits of integration 15
Collaboration with state partners 17
Awareness and Adoption 19
Awareness of Direct File remains low 20
Media coverage increased taxpayer doubts 22
Limited scope precludes widespread adoption 23
Identity verification deterred taxpayers 24
Taxpayer Experience 27
What's new? 27
Customer satisfaction reached new highs 27
Accuracy and experience are linked 29
Trust is an evolving issue 31
Future opportunities 32
Data Import 34
How it was built 34
Taxpayers praised Data Import 36
Limitations of imported data 37
Future opportunities 39

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Customer Support 40
Personalizing support via Authenticated Chat 40
Future opportunities 41
Budget and Costs 42

Appendix A: Preliminary Filing Season 2025 Summary Statistics 43

Appendix B: 2025 Direct File Experience Survey Results 47
Appendix C: Preliminary Tax Year 2023 Individual Taxpayer Burden Survey Results 53

Appendix D: 2024 Taxpayer Experience Survey Results 57

Appendix E: Ways of Working 60
Appendix F: Engineering Approach 65

Appendix G: Accessibility Beyond 508 Compliance 70

Appendix H: Design and Content Approach 74

Appendix I: Insights to Action 80

Appendix J: Tax Logic Design Principles 85

Appendix K: Data Import Design Principles 90

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Executive Summary
Usage of Direct File more than doubled in its second year, and measures of customer
satisfaction are up across the board, even as the service expanded beyond the early
adopter audience of last year's pilot. Customer satisfaction was driven by game-changing
improvements in the taxpayer experience, including One-Step Signature, Authenticated
Live Chat, an Enriched State API, and Data Import.

Key results from filing season 2025 include:

• Eligibility doubled to 32.2 million taxpayers, up from 15.4 million last year. (p. 8)

• Direct File rolled out to 25 states, up from 12 last year, including12 new
partnerships with income tax states. (p.12)

• Despite eligibility increases and availability for all of filing season, traffic was flat,
only up 16% year over year, due to lack of awareness and public confusion. (p.19)

• However, conversion of these taxpayers was higher, and Direct File's usage more
than doubled to 296,531 accepted returns, a 111% year-over-year increase. (p.19)

• 94% of taxpayers described their experience as "Excellent" or "Above Average," up

from 90% in the prior year. (p.28)

• Direct File's Net Promoter Score increased to +80, up from +74 last year. (p. 27)

• The Average Wait Time for live chat with customer support was 44 seconds, up
slightly from 40 seconds in the prior year. (p. 40)

• Due to various improvements to help taxpayers file more accurate returns, Direct
File's submission acceptance rate increased to 87.9%, up from 73.4% in the prior
year. 91.2% of returns were accepted on the first attempt, and Direct File now
outperforms all other do-it-yourself filing options in submission accuracy. (p. 29)

• 210,026 returns included a Form W-2 that was imported from IRS records. 98% of
taxpayers who were offered the option chose to import Form W-2 data.
Additionally,13,993 taxpayers imported Forms 1099-INT. (p. 36)

• Identity theft and refund fraud using Direct File remained negligible. (p. 25)

• The IRS spent $41 million on Direct File for filing season 2025, up from $24.6
million for the 2024 pilot. (p. 42)

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Secretary Bessent has laid out three areas of focus for the IRS—customer service,
privacy, and collection—and we anticipate this framework will be formalized in the
Strategic Plan for Fiscal Years 2026-2030 with Goal 2.3: Deliver a Modern Taxpayer
Experience to Improve Service, Privacy, and Collection) Direct File squarely delivers on
this goal by providing a modern taxpayer experience that addresses all three areas.

• Customer service: Direct File is beloved by its users, who can easily file accurate
tax returns fast. Customer support is provided exclusively via live chat, not phones,
and the IRS is able to answer taxpayer questions efficiently while taxpayers
benefit from an average wait time of just 44 seconds. 94% of taxpayers describe
their experience as "Excellent" or "Above Average." Data Import and other
improvements have increased customer satisfaction, both increasing the accuracy
of returns and potentially reducing the demand for downstream customer service
interactions.

• Privacy: Identity theft and refund fraud using Direct File is negligible as a result of
Direct File's strong identity protections. This generates cost savings for the IRS by
reducing the number of legitimate returns selected by the Taxpayer Protection
Program (TPP) as fraudulent or noncompliant. The IRS's cost to resolve those
selections ranges from $5.11 to $252.10 per return. Direct File's focus on
empowering the taxpayer and building tax literacy could also help taxpayers avoid
unscrupulous preparers and associated scams.

• Collection: Direct File offers the IRS a powerful lever to increase the accuracy of
tax returns. Direct File now outperforms all other do-it-yourself tax filing options in
submission accuracy. The introduction of Data Import furthers the goal of accurate
collection by preventing taxpayers from overlooking forms and making errors while
inputting information. Accurate returns ensure the IRS is collecting the revenue the
government is owed and avoid the downstream costs associated with audit and
collection follow-up work.

' Pursuant to statute, the new Strategic Plan will be published by February 2026.

5
Introduction
What is Direct File?
Direct File is a service that provides taxpayers the option to electronically file their federal
tax return for free, directly with the Internal Revenue Service (IRS). Direct File is an
interview-based service that is intended to work as well on a mobile phone as it does on a
laptop, tablet, or desktop computer. It is available in English and Spanish and is designed
to be accessible to taxpayers who have a variety of attitudes, aptitudes, abilities, and
access needs.

Customer support is a critical part of the taxpayer experience of Direct File, with bilingual
live chat provided by IRS assistors who can offer technical support and basic clarification
of tax law questions. As a result, this function is embedded within the operations of the
service itself. A "one team" approach promotes a holistic experience for taxpayers and
creates feedback loops to improve the Direct File product in response to customer support
questions in real time and throughout filing season.

Although Direct File only files federal tax returns, taxpayers also have state and local
filing obligations. Direct File facilitates the completion of these obligations by providing a
seamless experience in which taxpayers can optionally import their federal return data
into a third-party tool that can file state and/or local taxes, without needing to reenter
information.

Background
Following the successful conclusion of a pilot in filing season 20242 and feedback from a
variety of partners, the IRS decided to continue to provide Direct File as an option to
taxpayers.3 As this decision was announced on May 30, 2024, the IRS again had an
abbreviated development cycle to prepare Direct File for filing season 2025, but was able

2 IRS. IRS Direct File Pilot: After Action Report, Publication 5969 (5-2024) Catalog Number 94963W.
https://www.irs.gov/pub/irs-pdf/p5969.pdf
3 IRS. "IRS makes Direct File a permanent option to file federal tax returns; expanded access for

more taxpayers planned for the 2025 filing season," May 30, 2024.
https://www.irs.govinewsroom/irs-makes-direct-file-a-permanent-option-to-file-federal-tax-
returns-expanded-access-for-rnore-taxpayers-planned-for-the-2025-filing-season

6
to deliver significant expansion and improvements, including addressing all of the future
opportunities identified during last year's pilot.

As first described in Direct File's 2023 Report to Congress4, the IRS employs a continuous
development approach to building out Direct File, standard in the private sector but
unusual in government. In this model, Direct File is not built in a burst of initial investment,
but the investment is instead spread out over time, with data and feedback from real
taxpayers helping the team to identify the most impactful improvements each year.

We wrote, "A continuous development approach ensures the product meets the
experience expectations of taxpayers year after year, while also keeping costs
predictable:'This model avoids Direct File becoming a "legacy" system requiring periodic,
expensive "modernization," while also ensuring the IRS can adapt the technology to new
demands and priorities. But as we noted then, "for continuous development to work, it is
imperative that the program have consistent funding at adequate levels."5

About this report

This report describes the improvements to Direct File that were made for filing season
2025, the results of these improvements, and data that could inform future decisions
about the service, including opportunities to build upon an already great experience and
to scale the service to reach more taxpayers.

Appendices A-D provide additional raw data from Direct File returns and surveys.
Appendices E-I describe the ways of working that have enabled the IRS to deliver and
continuously improve a modern taxpayer experience like Direct File. And Appendices 1
and K offer vignettes of the design principles that the team employed to realize that
experience when building tax literacy and importing data, respectively.

4 IRS. IRS Report to Congress: Inflation Reduction Act §10301(1)(B) IRS-run Direct e-File Tax Return
System, Publication 5788 (5-2023) Catalog Number 93968P. https://www.irs.gov/pub/irs-
pdf/p5788.pdf
5 Ibid. Page 17.

7
Expanding Reach
What's new?
For filing season 2025, Direct File added support for:

• Premium Tax Credit, enabling taxpayers to reconcile advance credit payments for
health insurance

• Child and Dependent Care Credit and dependent care benefits

• Form 1099-R retirement income, including distributions from 401(k)s, pensions,

annuities, and other types of employer-sponsored retirement plans

• Retirement Savings Contribution Credit (Savers'Credit) and the Credit for the
Elderly or the Disabled

• Health Savings Accounts (HSAs) and the HSA deduction

• Interest income greater than $1,500

• Alaska Permanent Fund Dividend payments, making Alaska residents eligible for
Direct File

Eligibility increased to 32 million

Eligibility for Direct File more than doubled, increasing to 32.2 million taxpayers in filing
season 2025, up from 15.4 million in 2024. Each addition to scope allows more low-and
moderate-income taxpayers and their families to access Direct File. One taxpayer wrote,
"Other software would require me to pay to submit a simple tax return because I had an
HSA form. This was free to do and direct through the IRS."

Scope additions also promote a better taxpayer

experience. In 2024, many Direct File taxpayers
"Other software would require
were rejected for failing to file Form 8962, me to pay to submit a simple
Premium Tax Credit. This is a common mistake and
tax return because I had an
one of the top reasons for rejection among all
electronically filed returns. However, since Direct HSA form."
File did not support Form 8962, its users
experienced greater burden after making this error, as they could not fix it in Direct File
and needed to seek out other filing options. By adding support for the Premium Tax Credit

8
and Form 8962 in filing season 2025, taxpayers were now able to easily fix this mistake
and didn't need to lose the work they had already done.

Like any software product, Direct File is not without bugs. The category of bug that the
Direct File team spends the most effort to prevent is any bug that could affect the
accuracy of a tax return. These are bugs that would cause Direct File, despite being
provided with accurate and honest answers by the taxpayer, to produce an inaccurate tax
return. During filing season 2025, the team identified two such tax accuracy bugs while
Direct File was publicly available. Due to their rarity, no taxpayers encountered these bugs
before they could be fixed. As a result, Direct File had a 100% tax accuracy rate in 2025,
up from 99.982% in the prior year.6

Direct File's approach

Direct File doesn't impose an income limit or other arbitrary restriction on eligibility.
Instead, it follows the precedent of the Volunteer Income Tax Assistance (VITA) program.
VITA aims to assist low-income taxpayers (among other categories including persons with
disabilities, persons with limited English proficiency, Native Americans, individuals living in
rural areas, members of the Armed Forces and their spouses, and the elderly), but it does
so by identifying the tax provisions most relevant to these audiences and marking other,
less relevant provisions as out of scope (not supported).

Direct File selects tax scope that accommodates the needs of a significant portion of low-
to middle-income working individuals, couples, and families with wage income. Scope is
considered based on four criteria:

1. Prevalence: How many additional taxpayers would be eligible?

2. Complexity: What level of effort would be required to implement it?
3. Ease of explanation: Would it make it easier for taxpayers to self-identify as in-or
out-of-scope?
4. Customer support: Would it impact the demand for customer support or implicate
additional training needs?

With data and research from the pilot, the IRS could draw upon a wealth of information
from taxpayers about how they used the tool, where they had trouble, and which
unsupported items were most requested. These analyses and findings helped shape the
tax scope of Direct File's second year.

6 Although not necessary this year, taxpayers who are affected by bugs receive math error notices
and a refund of overpayment.

9
For example, retirement income and Form 1099-R was considered an important item but
was initially deprioritized due to their complexity. However, support for retirement income
was a top request during filing season 2024. The team also identified instances where
taxpayers reported a Form 1099-R as Social Security benefits, hoping this workaround
would suffice (it didn't—it led to inaccurate returns). Given its importance to taxpayers,
and to ensure taxpayers use Direct File accurately, the team accelerated development of
retirement income.

Although prevalence is listed first among the four criteria, Direct File sometimes needs to
prioritize items despite their limited reach. For example, the Credit for the Elderly or the
Disabled is claimed by fewer than 75,000 taxpayers each year. Yet one of Direct File's
values is that taxpayers "should not leave money on the table." While the Eligibility
Checker could indicate that the credit is not supported, it is virtually impossible for a
taxpayer to know whether they'd be eligible to claim it without doing the calculations for
themself. As Direct File expanded to serve more seniors, the team considered it important
to support this credit so that taxpayers didn't miss out on tax benefits by using Direct File.

Direct File doesn't support every unusual scenario for supported income types or credits.
Instead, the team may identify subsets of the scope item that best map to the criteria. For
example, for filing season 2025, Direct File only supported employer-sponsored
retirement plan distributions (the most common type) and doesn't yet support Form 5329.7
If a taxpayer answers Direct File's questions in a way that indicates they require forms that
are not supported, Direct File will refer them to other filing options.

Table 1 shows a high-level summary of Direct File's filing season 2025 scope.

Table 1. Direct File tax scope

Basics Income

• Forms 1040 and 1040-SR • Wages

• Must be a U.S. resident • Interest
• Any filing status • Unemployment compensation
• Dependents (claiming by non-custodial • Social Security benefits
parents not supported) • Retirement income from employer-sponsored plans
• Language and accessibility preferences • Dependent care benefits
(Schedule LEP, Form 9000) • Alaska Permanent Fund Dividend

'Form 5329 is used to calculate additional taxes on qualified plans like 401(k)s and HSAs when the
taxpayer didn't follow all the rules for their qualified plan.

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Deductions and Adjustments Credits

• Standard deduction • Child Tax Credit and Credit for Other Dependents
• Student loan interest deduction • Earned Income Tax Credit
• Educator expenses deduction • Premium Tax Credit
• Health Savings Account deduction • Child and Dependent Care Credit
• Retirement Savings Contribution Credit
• Credit for the Elderly and Disabled
• Claiming credits after disallowance (Form 8862)

Future opportunities
The following items are likely priorities for next filing season:

• Gig economy and self-employment income—Brings Direct File to virtually all

Earned Income Tax Credit-eligible taxpayers. This is an especially challenging part
of the tax code that could benefit from a free, easy-to-use experience.

• Education credits and scholarship income— Completes the major refundable tax
credits and brings additional college students into scope.

• Additional Form 1099-R distribution codes, Individual Retirement Arrangements

(IRAs), and Railroad Retirement Benefits—A top reason taxpayers are unable to
use Direct File, and it's difficult to explain limited scope around retirement income.

• State paid family and medical leave—Important for state partners.

• Gambling income—Increasingly common income type with low awareness.

• Dividend income—Frequent taxpayer request with low level of effort.

Apart from any individual scope item, the most significant opportunity for improvement is
for Direct File to identify a public multi-year roadmap of planned tax scope. Such
roadmaps are not incompatible with agile software development, provided they are
permitted to flex as new information or priorities emerge, or as tax law changes. But a
roadmap could provide much-needed clarity for taxpayers to understand when Direct File
will be available to them, for states to plan the development of their own filing tools, and
for industry to understand the IRS's intentions.

To date, efforts to create such a roadmap have been stymied by a lack of engagement
from key policy stakeholders. If Direct File is truly a permanent filing option, it should have
a public roadmap spanning three to five years into the future.

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States
What's new?
• Direct File expanded to 25 states, up from 12 in the prior year, including 12 new
income tax states and Alaska.

• Third-party tools that import data from Direct File are now available in 12 of 16
supported income tax states.

• Direct File introduced an Enriched State API, enabling taxpayers to import

information that is not present on their Form 1040 into state tax tools, further
streamlining state returns by eliminating redundant questions.

Background
Although state tax codes have varying degrees of conformance to the federal code, states
typically ask taxpayers to provide certain information from their federal return, from which
state tax liability can be calculated. As a result, tax preparation can be thought of as a
two-step process: first prepare a federal return, then prepare a state return using the
federal return information.

Direct File facilitates this two-step process by 1) directing taxpayers to a state tax tool
following completion of their federal return, ensuring that taxpayers understand that they
may have state tax obligations, and by 2) optionally allowing taxpayers to import their
federal return data into that state tax tool, minimizing duplicative data entry. For an
illustration, see Figure 1.

Figure 1. Conceptual overview of state taxes in Direct File

(OPTIONAL)
Taxpayer creates Taxpayer prepares
Direct File informs Taxpayer imports
Taxpayer files their account with or and files their state
federal return
taxpayer of the
state tool
signs in to the state
tool
their federal return
data from Direct No return in the state
tool
File

To facilitate the taxpayer importing their federal return data into the state tool, Direct File
implemented a secure Application Programming Interface (API). Instead of downloading
an unencrypted file that could be stolen by malicious actors, taxpayers were able to
transfer encrypted data from their Direct File account directly to their account with the
state tool.

12
The IRS works closely with states and their technology partners on Direct File, attending
meetings of the Federation of Tax Administrators, presenting to state tax officials, and
holding regular calls with state revenue agency teams. As a result of this engagement,
Direct File was able to quadruple the number of income tax states from four in the 2024
pilot to 16 for filing season 2025. The IRS and states executed Memorandums of
Understanding (MOUs) documenting their shared understanding.8

For filing season 2025, no state ended their partnership with Direct File or had to pause
their development. All states were ready for eligible taxpayers to use Direct File and their
state filing tool on the first day of filing season. Throughout filing season, no major issues
were uncovered in any of the 25 states.

The Direct File team demonstrated flexibility and adaptability of its partnership model by
working with states with different technical team structures and approaches. Twelve
states integrated with the secure State API. Of the states with integrations:

• Six states were supported by FAST Enterprises, the vendor for their GenTax state
filing tools, all of which existed independent of Direct File prior to the partnership.

• Four states were supported by Code for America, which tailored their
FileYourStateTaxes tool to the requirements of each state. In contrast to tools
supported by FAST Enterprises, the Code for America FileYourStateTaxes tool did
not exist for these states prior to the integration and partnership with Direct File,
so it was a new online filing option for these states'taxpayers.

• One state, New Jersey, led the effort to build out a new tool in their Office of
Innovation, via a partnership with Code for America that allowed them to leverage
the code for the FileYourStateTaxes tool and customize it for New Jersey's needs.

• One state, New York, built a new filing tool for filing season 2025, after working
with Code for America to use their FileYourStateTaxes tool during the 2024 pilot.

Enriching the State API

The secure API transfers an Extensible Markup Language (XML) version of the forms and
schedules of the federal tax return, using the existing Modernized e-File (MeF) schema
that is already in use by states. This format has been in use for many years, and the IRS,
states, and state technology vendors are well-versed in it.

'Most states opted for five-year MOUs with the IRS; those are set to expire in May of 2029. Some
states opted for one-or two-year MOUs, allowing for a shorter time for review and adjustments if
necessary.

13
In the 2024 After Action Report, the Direct File team wrote, "Although the MeF schema
provides an effective machine-readable version of tax forms, this may not be the best
long-term data interchange format for Direct File and states should Direct File continue in
future years. Tax forms only communicate what the taxpayer claimed on their return, for
example, that they and their children were eligible for the Earned Income Tax Credit
(EITC). However, when states adopt provisions similar to EITC, the eligibility requirements
may differ from the federal requirements in small ways, meaning that taxpayers who are
ineligible for EITC at the federal level may be eligible at the state level, or vice versa. The
impact is that state tools may need to re-ask questions already asked by Direct File to
establish eligibility for state credits or other provisions."9

In filing season 2025, Direct File and states took their first steps toward a new data
interchange format by developing an Enriched State API. In addition to the MeF XML
forms and schedules, Direct File now provides a Javascript Object Notation (JSON) payload
with additional information, such as answers to Direct File's questions as provided by the
taxpayer. States were not required to use this payload, but they could use it to streamline
the experience of the state filing tool.

The Direct File team prioritized which data elements were added to the JSON payload
based on requests from state partners during the 2024 pilot year. State partners
requested fields that would be most useful to pre-populate for users in their state filing
tool, both to reduce manual entry mistakes and to improve the state tax filing experience.
Data elements requested by states were continuously added to the JSON payload through
the beginning of filing season 2025, reflecting the Direct File ethos of continuous, iterative
improvement.

When asked to reflect on their

"[A] n excellent example of iterating in experience working with the Direct

response to a user need and allowed File team this year, state technical
partners said that they appreciated
us to vastly improve our software in the new JSON payload of additional
year two." taxpayer data. They reported that
these additions "made the state
returns much simpler since we didn't have duplicate data entry" and gave them flexibility
to work around data formatting limitations of the existing MeF XML schema. As one state
vendor shared, "This [feature] was an excellent example of iterating in response to a user
need and allowed us to vastly improve our software in year two."

9 IRS. IRS Direct File Pilot: After Action Report, Publication 5969 (5-2024) Catalog Number 94963W.

Page 40. https://www.irs.gov/pub/irs-pdf/p5969.pdf

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Benefits of integration
Taxpayer experience
Between 89-98% of taxpayers who used an integrated state tool reported that they were
"satisfied or very satisfied" with the experience. States tracking Net Promoter Scores, as
Direct File does, reported an average score of +87. Some quotes from taxpayers include:

• Arizona: "I am so happy with the time it took and how clear and concise the
questions were. The data transfer was seamless and I had a very positive
experience. I will recommend it to everyone I talk to."

• New Jersey: "I think my favorite thing about this site is that I don't have to fill in so
much info because a large majority of it was filled in automatically from my federal
return."

• North Carolina: "The process made me feel confident my taxes were filed
correctly and efficiently. I will be using this method in the future. Definitely worth it
for peace of mind and convenience."

State partners were pleased with how integrating with Direct File increased taxpayer
satisfaction with their tools. One wrote, "Our goal was to improve customer experience
with our state product by integrating with IRS Direct File, and this goal was met. Our
feedback rating has increased from 3.3/5 stars at this point last year to 4.4/5 stars."
Another wrote, "State IRS Direct File [returns] have an average feedback rating of 4.6
which is higher than other [State filing
tool] submissions. Taxpayers are pleased "Our goal was to improve customer
with the experience and it's quick."
experience with our state product by
In general, integrated states reported
integrating with IRS Direct File, and
that taxpayers were able to complete
their return more quickly because of the this goal was met."
ability to import their data from Direct
File. Across all tools, states reported that the median time taxpayers spent completing
their state return was 10 minutes, with 80% of taxpayers completing their return in 15
minutes or less. Taxpayers in some states were able to complete their state return in as
little as six minutes. Across all integrated states, taxpayer time to submit a return using
the state filing tool was over 50% faster for taxpayers who started in Direct File and
transferred their information to the state tool. One state tracked feedback on the data
transfer between Direct File and the state filing tool, and 94% of taxpayers thought that it
was "seamless and quick."

The conversion rate of taxpayers who filed with Direct File and then transferred that
return to a state filing tool was high, with 9 out of the 12 integrated states having 85% or

15
higher conversion. These results support the business case for non-integrated states to
integrate in the future. For states below 85% conversion, the Direct File team conducted
user research during the filing season to identify improvements that might encourage
more taxpayers to transfer their federal return to their state filing tool.

Accuracy and efficiency

States cited the reliability and accuracy of Direct File returns as critical to the
development and operation of their own filing tools. One state's technology partner said,
"Critical to our success was that Direct File has proven itself to be a reliable product. [...]
We were able to trust that the taxpayer's tax situation was as summarized on their federal
return. [...] We were able to trust Direct File had thought about and accommodated edge
cases. We did not have to re-ask tax questions. [...] All of this was critical to our approach
of streamlining the state filing process, not asking unnecessary questions, providing clear
and useful taxpayer assistance, and not taking substantial time and effort reviewing
previously-entered information. If the product had been less reliable, with less robust and
thorough functionality, our state-side process
would have had to be clunky and duplicative." "We were able to trust Direct
States reported that Direct File returns were more File had thought about and
accurate compared to returns submitted by other accommodated edge cases."
tax filing tools. Several states reported that for
Direct File returns, the suspend and amend rates—measures of whether tax returns
require changes after submission—were lower year-to-date compared to other filing
methods. One state shared that 95.6% of Direct File returns were complete and correct
based on error rates and the rate of amended returns. Another state reported, "Less than
0.5% of Direct File returns received
"The Direct File program has proven by the state have been amended at

that government can successfully the state level, which implies the
data transfer is accurate."
modernize required administrative
Several states cited the benefits
processes. Direct File reduces the and efficiencies to a fully electronic
overall taxpayer burden and improves and integrated federal and state

processing efficiency and accuracy for filing process, citing "there are cost
savings for the department when
the IRS and participating states." switching from paper filing to
electronic filing, due to not needing
to key paper returns, scan images, and review keying errors." One state said, "The Direct
File program has proven that government can successfully modernize required
administrative processes. Direct File reduces the overall taxpayer burden and improves
processing efficiency and accuracy for the IRS and participating states."

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Collaboration with state partners
States participating in Direct File reported that they each invested hundreds of thousands
of dollars and many employee hours to prepare for this filing season, including the
development, testing, operation, and marketing of state tools in coordination with the IRS.
States plan to continue to invest resources into the Direct File ecosystem as they pursue
solutions that make electronic tax filing and compliance as easy as possible.

During filing season 2025, the IRS shared taxpayer feedback and usability research
learnings with states, which helped states improve the content and design of their
applications. In advance of the filing season, the team shared takeaways from usability
testing conducted during the 2024 pilot and provided a state tax tool landing page
template for states to reference with examples of design and content best practices based
on taxpayer feedback.

States also provided feedback from their taxpayers. The New Jersey team noticed that
confusion around estimated taxes was causing taxpayers to enter incorrect payments and
amounts when filing. The New Jersey team raised this issue to Direct File, and our team
revised the estimated tax content to prevent confusion and errors. Direct File shared this
improved language with the New Jersey team, so that they could make updates to their
tool as well. After the improvements, the incidence of incorrect payments and amounts for
estimated taxes dropped to zero. This highlights how close collaboration with state
partners helped to drive improvements for both Direct File and participating state tools.

State partners were invaluable testers of Direct File. State testers identified bugs in Direct
File via their testing processes and provided helpful early feedback on new areas of scope
and functionality. Another successful part of testing and preparation was the ability for
states to participate in a Controlled Launch period with Direct File. This allowed Direct File
and states to test in production with real users, confirm the functionality of the State API
to transfer federal data to state tools, and iron out any bugs in the process.

State technology teams tended to use a waterfall (sequential) software development

approach and at times this did not align well with Direct File's agile and iterative
development approach. For example, some states had internal development deadlines for
their state tools that were scheduled prior to Direct File completing all filing season 2025
functionality. This presented a risk that states would not be able to adapt to any
unanticipated changes after their deadlines. In other cases, states had a phased
development approach that prioritized building specific credits and forms. This phased
approach caused delays in confirming integration with Direct File. An additional layer of
difficulty was the relatively short development timeframe, which started in July 2024 for a
January 2025 launch. In the end, all states launched on time, but additional coordination

17
around development approach and phasing would be helpful to prioritize work and align
application readiness.

More states are poised to join Direct File, but their decisions to invest resources are
jeopardized by uncertainty about the program's future and the lack of a roadmap from the
IRS. As noted by one state, "Each year, there is only a narrow window in which states can
make the choice to join Direct File— after April 15, but before their plans for the following
season are set in stone. Direct File needs to be very visible to state tax departments during
this period, able to quickly answer questions, and willing to work with them to overcome
perceived obstacles. Even more importantly, Direct File will need to project unvarnished
certainty that the program will be around for the long term; otherwise, most will not make
the long-term investments needed to support it."

18
Awareness and Adoption
Through April 20, 2025, nearly 3.9 million taxpayers started the Direct File Eligibility
Checker, 751,235 taxpayers logged in to Direct File, and 296,531 taxpayers submitted
accepted tax year 2024 returns. Figure 2 shows the progress of taxpayers through Direct
File this year as compared to the same period last year.

Figure 2. Direct File conversion funnel, through April 20, 2025

4.5M
3,872,097
4.0M
(*) 3.5M 3.3M
,_
6
3.0M
"5
I 2.5M
1) 2.0M
2
E 1.5M 1,240,190
z
Z 1.0M 678K 680,407
423K 7.
51,235 395K
0.5M 161K 311,530 141K 296,531
0.0M I . IM ME
Start eligibility Complete Create/sign in Start a tax Submit a tax Submit an
checker eligibility to an IRS return return accepted tax
checker account return
FS2024 m FS2025

This comparison is skewed by the fact that in filing season 2024, Direct File was only
widely available starting March 8, about halfway through filing season. In 2025, Direct
File's availability for the entirety of filing season, combined with expansions in eligibility
and states, would have been expected to translate to a significant uptick in traffic as
shown by the number of taxpayers who started the eligibility checker. However, traffic was
only up by 16% year over year.

Direct File fared better at conversion, the rate at which taxpayers who visited the website
filed an accepted tax return. Conversion was up 82% year over year, resulting in a
combined 111% increase in accepted returns. However, the 296,531 returns accepted via
Direct File underperformed IRS expectations, which forecast between 450,000 and 1.25
million accepted returns. This section will describe the expected and unexpected
headwinds that could have depressed usage, and which could point to future opportunities
to reach additional taxpayers.

19
Awareness of Direct File remains low
The 2024 After Action Report said, "The 2024 Taxpayer Experience Survey (TES) will
again include questions about Direct File, potentially revealing more about taxpayers'
updated level of interest with the benefit of the pilot and associated media coverage."10
The results of the 2024 TES continued to show significant interest in Direct File, but it also
demonstrated that awareness among taxpayers remains low.

• When asked, "Did you hear anything about the IRS Direct File program described
above during the most recent filing season?" only 19% of taxpayers said "Yes."

• Among that 19%, favorability was high, with 63% expressing a positive impression
of the program, and only 4% expressing a negative impression (see Figure 3).

• The TES also identifies the outreach methods that were most effective at reaching
taxpayers in 2024, led by IRS.gov, cited by 42% of taxpayers (see Figure 4).

Figure 3. "Based on what you've heard, Figure 4. "Where did you hear about the
what is your impression of the IRS Direct IRS Direct File program?"
File program?"

I RS.gov 42%
• Very positive
Local/national news 34%
Somewhat positive

Neutral Social media 22%

• Somewhat negative Friend or family 22%

• Very negative
Other U 6%

In 2025, the IRS chose to deemphasize Direct File on IRS.gov in advance of a Treasury
decision on the future of the program, and as will be explored below, media coverage of
uncertainty around Direct File represented a marked shift from the tenor of 2024
coverage. Only word of mouth, as reflected in Direct File's Net Promoter Score (see
Taxpayer Experience), and continued outreach by states and community-based
organizations remained as positive factors toward awareness and uptake.

10 IRS. IRS Direct File Pilot: After Action Report, Publication 5969 (5-2024) Catalog Number
94963W. Page 18. https://www.irs.gov/pub/irs-pdf/p5969.pdf

20
Although past research has consistently shown that tax filing is a "sticky" behavior, where
taxpayers are hesitant to change methods of filing that have worked for them in the past,11
awareness is a bigger barrier to adoption. On the TY2023 Individual Taxpayer Burden (ITB)
survey, 30% of respondents who did not use Direct File cited "I did not know Direct File
was available" as their reason for not using it, as compared to 22% who selected "I
preferred to use the same method I used in prior years" (see Table 2). This was tied with
the other top reason, "I prefer to use a paid tax preparer" (as discussed previously in the
2023 Report to Congress, taxpayers who rely on the services of a preparer are less likely
to be interested in Direct File).

Table 2. "Why did you not consider using IRS Direct File?"

Reason indicated for not using Direct File Percent

I did not know Direct File was available 29.9%

I prefer to use a paid tax preparer 29.9%

I preferred to use the same method I used in prior years 21.6%

I was not eligible to use Direct File 6.0%

I didn't want to use something that is new 4.7%

I already file for free 3.3%

I was worried it wouldn't get me the best refund 2.8%

I did not want to file my state taxes separately 0.7%

I had a negative opinion of Direct File 0.4%

I had difficulty creating my online taxpayer account or using the software 0.4%

I filed my taxes before the Direct File pilot became available 0.3%

The ITB responses also illustrate the opportunity for better outreach, such as the comment
from a former paper filer who tried Direct File after learning their local library did not have
paper forms available. They said, "It worked very well. I went to my local public library for
IRS forms and they told me they did not have paper forms, but I should try the Direct File. I

" See Patterson et al., Understanding Taxpayer Motivation for Filing Method Selection to Improve
Customer Service, MITRE Corporation, 2022. Asked "Why did you choose <tax filing method>?",
78% selected "I've used this method before," 61% selected "It's easy for me to use this method,"
33% selected "This method allows me to retain information from my previous year's return," and
30% selected "This method is a lower cost than other methods," given the choice of up to five
responses.

21
suggest putting up flyers about Direct File where people go to get IRS printed forms."
Another wrote, "I think it should be advertised more, perhaps signs in post office and
courthouse."

Responses to the Direct File Experience "It was annoyingly hard to find.
Survey echoed this theme. One taxpayer
said, "Why can't I find this website
Once I found the service it was
anywhere on official gov websites. It easy to use, but finding it wasn't."
needs to be easily accessible. The only
reason I found it is because of an Instagram post with the website address." Another
wrote, "I went to a few IRS pages online before I found the exact one that linked me to
Direct File." Another said, "It was annoyingly hard to find. Once I found the service it was
easy to use, but finding it wasn't."

The 2025 TES will again include questions about Direct File, providing an updated view on
awareness and impressions of the program. Independent polling continues to suggest that
taxpayer interest in using a service like Direct File is high but confirms that usage is
negatively impacted by lack of awareness. A December 2024 survey, the Urban Institute's
Well-Being and Basic Needs Survey of adults ages 18 to 64, showed that 73% of
taxpayers are interested in using Direct File, including 78% of 18-34-year-olds. However,
68% of the surveyed taxpayers also said they did not know enough about Direct File to
feel comfortable using it.12

Media coverage increased taxpayer doubts

While much of the media coverage in 2024 focused on the appeal of Direct File as a free
filing option (e.g. "Against all odds, the government has created an actually good piece of
technology"i3), media coverage in 2025 focused on the question of whether Direct File still
existed and would continue to exist.

USA Today published an article headlined, "Eton Musk says he 'deleted'IRS Direct File.
Can taxpayers still use the free service?" The IRS did not respond to media inquiries about
Direct File's status, and although reporters could verify for themselves that the service
was still online, absent official reassurance, this led USA Today to write, "The program's
website was still up Wednesday morning, although an X account for an associated IRS

'Aravind Boddupalli, Margot Crandall-Hollick, Michael Karpman, Noah Kennedy. "Most Americans
Are Interested in Using IRS Direct File to Prepare and File Their Taxes." Tax Policy Center, March 26,
2025. https://taxpolicycenter.org/sites/default/files/2025-03/MOST-AMERICANS-ARE-
INTERESTED-IN-USING-IRS-DIRECT-FILE-TO-PREPARE-AND-FILE-THEIR-TAXES.pdf
13
Saahil Desai. "The IRS Finally Has an Answer to TurboTax." The Atlantic, March 20, 2024.
https://www.theatlantic.corn/technology/archive/2024/03/irs-direct-file/677818/

22
agency was down. The IRS offered no official comment. The big question now is whether
taxpayers will still entrust their returns to the embattled service."14 In syndication, this
article garnered even more catastrophic headlines, such as "Eton Musk 'deleted' IRS Direct
File: Should taxpayers worry about their tax returns?"15

This coverage resulted in a spike in customer support questions and a drop in usage.
Weekday returns fell 38% from Monday, February 3, the first day of negative coverage, to
Friday of that week. Over the course of filing season, social media listening continued to
observe taxpayers operating under the mistaken belief that Direct File was no longer
available or expressing concern that a Direct File return might not be considered valid (the
IRS does not discriminate between Direct File returns and any other e-filed tax return).
Despite 90% of prior-year Direct File users rating their experience as "Excellent" or "Above
average," only 30% returned to use it in filing season 2025.

Limited scope precludes widespread adoption

The largest percentage of taxpayers fell out of the conversion funnel during the Eligibility
Checker or before completing their return (see Figure 2). These are steps where taxpayers
may learn that they are not eligible to use Direct File, either because of their state or
because of their tax situation.

Direct File uses a "starting small to get it right" strategy, gradually expanding scope each
year. This approach has many advantages from a risk and budgeting perspective and has
ensured that the IRS's investment in Direct File showed immediate returns for taxpayers.
Yet unsupported scope items can negatively impact uptake out of proportion to their
nominal size. While state-by-state eligibility is easy to understand, tax scope eligibility is
more complex and uncertain. Questions about eligibility remain the largest source of
customer support inquiries, evidence of how burdensome these scope limitations can be
for eligible taxpayers.

While these disadvantages do not outweigh the clear need for government information
technology projects to deliver iterative value to taxpayers to avoid failure, they do provoke
an interesting question for future policymakers.

14 Daniel de Vise. "Eton Musk says he 'deleted IRS Direct File. Can taxpayers still use the free
service?" USA Today, February 4, 2025. https://www.usatoday.com/story/money/2025/02/04/did-
elon-musk-delete-free-irs-tax-preparation/78193236007/
15Daniel de Vise and Alexis Simmerman. "Eton Musk 'deleted' IRS Direct File: Should taxpayers
worry about their tax returns?" Austin American Statesman, February 5, 2025.
https://www.statesman.com/story/news/state/2025/02/05/irs-direct-file-taxes-elon-musk-deleted-
free-tax-preparation-service-tweet-x-18f/78241286007/

23
Direct File was greenlit in May 2023 as a one-year pilot. Just as scope was limited by the
abbreviated timeframe available to deliver the pilot in 2024, waiting until the end of May
2024 to decide to proceed with Direct File in filing season 2025 similarly limited the size
of the second-year expansion. While this step-by-step approach ensured that the IRS did
not expend funds ahead of stakeholder engagement and data analysis, it has reduced
what each iteration of Direct File could deliver and lengthened the amount of time it will
take for the IRS to catch up after years of sitting on the sidelines, particularly given
significant frictions that impede the scaling of a new service in the IRS, including
resistance to hiring experienced tech talent.

With clear evidence that Direct File offers significant value to taxpayers, decision-makers
should consider whether they are ready to place a larger bet on Direct File, commit to
hiring the talent necessary to support the service, and establish multi-year roadmaps that
provide clarity for states and taxpayers.

Identity verification deterred taxpayers

While1,249,190 taxpayers reached the end of the eligibility checker, only 751,235 or
60.6% successfully signed in. This number is significantly lower than the "true pass rate"
of 81% touted by the IRS, which represents the proportion of legitimate taxpayers who can
prove their identity at the Identity Assurance Level 2 (IAL2) standard using ID.me. This
"true pass rate" excludes those taxpayers who abandon the identity proofing process
before reaching its conclusion. However, these abandonments generally represent
taxpayers who have grown frustrated or impatient with the process, and it is therefore
important to count them when attempting to quantify the taxpayer experience of identity
verification and Direct File.

The effective pass rate of 60.6% is down from 62.5% in the

It was very stressful prior year. While Direct File did not repeat questions about
because of that."& taxpayers'experiences with identity verification on this year's
Direct File Experience Survey, some taxpayers provided
feedback anyway. One wrote, "It did take a LONG time to get it done mostly the process of
getting myself identified with ID.me. I was not familiar with all that downloading of
documents and photos. It was very stressful because of that:'Another said, "The reason
for my neutral rating about trust is mostly the amount of biometric steps required. Private
companies manage to file my taxes just fine without facial scans. If the IRS is going to
share things like citizenship status with other government agencies, it makes me wary of
sharing personal information." Others were wary of the involvement of private companies,
as with the taxpayer who said, "The IRS shouldn't be handing my data over to a private
company ever, even for identity verification."

24
By continuing to build and tout features that are enabled by identity verification, such as
One-Step Signature and Data Import, Direct File may eventually be able to offer a
significantly compelling incentive for taxpayers to endure a more difficult authentication
experience relative to other filing options. This would also then increase the population of
taxpayers able to take advantage of other authenticated experiences from the IRS. The
IRS has publicly indicated its desire to provide alternatives to ID.me for taxpayers to prove
their identity at the IAL2 level. But by mandating IAL2 for Direct File users, even while the
Modernized e-File system does not enforce IAL2 for other electronically filed returns,
many taxpayers will never get the chance to experience these advantages for themselves.

An alternative experience would allow taxpayers to file a return using the same means of
identity verification that the IRS provides for other electronic returns, such as prior year
Adjusted Gross Income (AGI). But taxpayers would be encouraged to "step up" to IAL2 to
gain access to features like One-Step Signature and Data Import. In this way, fewer
legitimate taxpayers would be denied access to Direct File, but they would still be
incentivized to move to the more secure option.

Direct File's use of IAL2 has financial benefits for the IRS. For both years of its operation,
identity theft and refund fraud rates using the service have been negligible. This is in part
due to Direct File's limited scope, which does not include certain tax provisions targeted by
malicious actors, and in part due to the higher identity assurance offered by IAL2. The
absence of fraud in Direct File is also a direct result of the disparity between Direct File
and other filing options; malicious actors will generally seek out the weakest links, and
there is no advantage to attempting the more difficult and costly exploit of Direct File so
long as there are easier targets available.

Cost savings for the IRS result from allaying costs of the Taxpayer Protection Program
(TPP). When a legitimate return is selected by TPP as fraudulent or noncompliant, the IRS
incurs costs ranging from $5.11 to $252.10 to enable the taxpayer to authenticate and
prove the legitimacy of their return. This includes $0.72 for notice to the taxpayer, and an
authentication cost that varies depending on method, as shown in Table 3.

Table 3. Cost of TPP authentication methods, Processing Year 2021

Telephone Online' In Person Correspondence

$72.73 $4.39 $251.38 $95.47

16Includes the average cost per user of identity assurance, $3.52. The IRS budgets this cost so as to
be borne by the first online service with which the taxpayer interacts, so a Direct File user only costs
TPP an additional $0.87, because the identity assurance cost was already incurred by Direct File.

25
Ultimately, this demonstrates the limitations of per-system assessment and the need for
the IRS to assess risk at the ecosystem level and develop a comprehensive strategy for
the future of identity assurance for tax filing. Tradeoffs that make sense when Direct File
is taken in isolation may no longer make sense when considered in this larger context, and
without a strategy for addressing the cost of prevention, mitigation, and the fraud itself,
across all filing options, it is not possible to move toward a more optimal solution for the
government, for industry, or for taxpayers.

26
Taxpayer Experience
What's new?
• Direct File continued to improve on the experience of electronic signatures, rolling
out the new One-Step Signature feature to most users.

• Using a data-driven approach to product iteration, Direct File made a series of

interventions to increase the submission acceptance rate, becoming the most
accurate do-it-yourself filing option.

• Direct File launched the top taxpayer-requested feature, Data Import. Taxpayers
were able to import biographical information like name and address, Forms W-2
and 1099-INT, Identity Protection PIN, and more. Data Import will be described in
detail in the next section.

Customer satisfaction reached new highs

For the primary quantitative measure of taxpayer opinions of Direct File, the IRS selected
the Net Promoter Scoresm (NPS) customer sentiment metric." The Direct File Experience
Survey asked taxpayers who used Direct File, "On a scale from 0 to 10, how likely are you
to recommend Direct File to a friend or family member?" The NPS methodology sorts
responses into three categories: respondents who rate Direct File a 9 or a 10 are
"promoters," ratings of 7 or 8 are "passives," and 6 or lower are "detractors." The
percentage of detractors is subtracted from the percentage of promoters (passives are
ignored), giving a score ranging from-100 to +100.

Direct File's NPS increased to +80, up from +74 in the prior year, as shown in Figure 5. If
compared to benchmark scores from financial services companies, Direct File would lead
in all nine categories, up from eight out of nine in the prior year.18

17 Net Promoter Score' is a service mark of Bain & Company, Inc., NICE Systems, Inc., and Fred
Reichheld.
18 Bain & Company. "New Bain Certified NPS Benchmarks: Companies Customers Love." Page 7.
https://media.bain.com/Images/BAIN_DIGEST_New_Bain_Certified_NPS_Benchmarks.pdf

27
Figure 5. Direct File's Net Promoter Score

5%

+80
• Promoters

Passives

• Detractors

Net Promoter Score

85%

When asked to rate their overall experience using Direct File, 94% of respondents chose
Excellent or Above Average, up from 90% in the prior year (see Figure 6). Taxpayers
described Direct File as "user friendly," pointing to its use of plain language, ease of
navigation, and helpful tax explainers. These
attributes were described as having a positive effect
Figure 6. "Please rate your overall
on their own confidence with tax filing.
experience using Direct File."
One said, "I liked being able to go step by step with
lots of information and help along the way. And the
• Excellent
ability to review and correct the information I
Li Above average
entered was awesome! Knowing I could fix a mistake
Average relieved the worry about not following the rules, etc.
• Below average My goal was to file my return in the easiest and least
• Very poor painful way, and this experience was even better
than I expected. And of course the fact that it is free
was a bonus!"

Taxpayers appreciated when the right level of detail was provided at the right time. One
said, "I appreciated the way the website had little pop-ups that explained what different
parts of my tax forms meant if I chose to click on them. I felt like they had the perfect
amount of information to make me feel well
informed." Another wrote, "As a first time "My goal was to file my return in
user, I can say the site is extremely user
friendly and the filing process is completed
the easiest and least painful way,
quickly. Loved the 'Tips'on what forms and this experience was even
(info) I needed to have on hand prior to
better than I expected."
starting my return." Another wrote, "I really
appreciate the simple, plain language. Even
as simple as saying, 'If this box contains other codes, that's okay.'It was like a person
talking to me. I also appreciated all of the tooltips that I could click on for more

28
information. It seems like the IRS put a lot of thought into Direct File and I really
appreciate it. It's really important to me that complex government processes be accessible
and also that I can do them directly with the government, not through a private
intermediary, whenever possible. Thank you!"

This ease of use especially benefits taxpayers who are electronically filing for the first
time. One said, "Once I got acclimated to using the computer to file, the step by step
process was pretty easy. I liked the fact that my income and tax information was imported
automatically and that I had a chance to verify accuracy." Another wrote, "This was my first
time filing my taxes alone and this was so simple and easy I literally went out of my way to
leave my feedback"

Taxpayers appreciated that

"Having a free, simple and well-explained Direct File is completely free,
method to file taxes really bolsters my with no hidden costs or fees. One

confidence in the tax system and seems wrote, "As a recently retired
person I am so grateful for this
more democratic." service. I won't be making much
moving forward so I'm very
grateful for this service that allows me to file my taxes in a simple and free way." Another
said, "I appreciate I was able to free Direct File this year. I NEVER get to file free on tax
returns. In this economy, every $0.01 saved is a bonus." Another said, "Having a free,
simple and well-explained method to file taxes really bolsters my confidence in the tax
system and seems more democratic."

Taxpayers appreciated the IRS's investment in building

Direct File. One wrote, "I commend the IRS and US
This is the first year that
Government for finally providing an iteration of this I've felt proud to file."
vital service to their constituents. [...] The IRS should
continue building out this service by including all forms of income reporting relevant to
the American people. This free service should be a primary budget allocation derived from
collected taxes from honest, hard-working Americans who take the initiative to participate
in American Society for its betterment. This is the first year that I've felt proud to file. Keep
up the good work! I'm looking forward to seeing how this system improves by this time
next year."

Accuracy and experience are linked

One of the most closely watched metrics for the Direct File product team is the submission
acceptance rate, the rate at which submitted tax returns are accepted by the IRS. By using
data to identify opportunities to prevent taxpayer error, Direct File has been able to

29
achieve massive gains on this measure, which taxpayers experience as reduced frustration
and time burden.

Figure 7. Submission acceptance rate In filing season 2025, Direct File's submission
acceptance rate increased to 87.9%, up from 73.4% in
100%
87.9% the prior year (see Figure 7). 91.2% of returns were

73.4%
accepted on the first attempt, and Direct File now
75%
outperforms all other do-it-yourself tax filing options in
submission accuracy. These gains were not the result of
50% a single feature but rather a concerted effort across the
team to iteratively address the most pressing accuracy
25% issues for taxpayers, using all the tools at our disposal:
data, user experience design, and integrations with IRS
0% source-of-truth systems.

FS2024 • FS2025 In the 2024 After Action Report, the team wrote, "Direct
File could leverage its existing identity assurances, and
the Electronic Signature Storage and Retrieval system (ESSAR), to completely deprecate
knowledge-based authentication (KBA) on Direct File. This would mean that taxpayers
would no longer need to provide last year's AGI or self-select PIN to sign their return." A
taxpayer entering an incorrect AGI or self-select PIN was Direct File's single most
frequently triggered rejection reason in filing season 2024. Although Direct File
experimented with multiple interventions to address this issue, including improved
guidance to taxpayers and the ability to import this information from the taxpayer's
Individual Online Account, these interventions could only reduce this rejection reason.

With its new One-Step Signature feature, achieved by integrating with ESSAR, Direct File
was able to eliminate this source of rejections for most returns. Signing a Direct File return
is now as easy as checking a box, although taxpayers are also prompted to choose a self-
select PIN for use next year should they not use Direct File. The feature is only enabled for
returns with a single signature; if the return includes two signatures, like most Married
Filing Jointly returns, Direct File is not yet able to offer One-Step Signature, as only one of
the two taxpayers has been authenticated. For these taxpayers, Direct File uses the same
signing experience as last year, including offering to import last year's AGI from the
taxpayer's Individual Online Account; this is an opportunity for future improvement.

Direct File's work to increase submission accuracy did not stop there. The team took a
data-driven approach to increasing the submission acceptance rate, and systematically
worked to reduce some of the other most frequent rejection reasons. The next most

19 IRS. IRS Direct File Pilot: After Action Report, Publication 5969 (5-2024) Catalog Number
94963W. Page 28. https://www.irs.gov/pub/irs-pdf/p5969.pdf

30
common rejection reason was for taxpayers who received Form 1095-A according to IRS
records, but who did not include Form 8962 on their return. Many taxpayers are unaware
that they need to include this form, and answer Direct File's question about it incorrectly.

In the final weeks of filing season 2025, Direct File used its Data Import capability to alert
taxpayers if the primary filer had received a Form 1095-A. This capability was limited to
the primary filer and could not alert taxpayers if the Form 1095-A only included the
secondary filer or a dependent. But nevertheless, the introduction of this simple prompt to
the taxpayer resulted in a 28.3% reduction in returns being rejected for failure to include
Form 8962.

As will be explored in the next section, Direct File also automatically imported the primary
filer's Identity Protection PIN (IP PIN) if they had one. By not requiring taxpayers to know if
they had been issued an IP PIN, and avoiding the risk of the taxpayer getting it wrong,
Direct File saw a 78% reduction in IP PIN-related rejections. There are additional
opportunities to further increase the submission acceptance rate, such as integrating
address validation into Direct File, which the team will continue to pursue using a data-
driven approach to product iteration.

Trust is an evolving issue

In filing season 2025, 68% of taxpayers said that they agreed with the statement that
their experience with Direct File increased their trust in the IRS (see Figure 8). One
taxpayer wrote, "[Being] able to directly file online with the IRS increases my trust in the
competency of the IRS and its ability to function in the modern age." Another noted how
the transparency of Direct File builds trust in the
tax system, saying, "I really love how there were Figure 8. "Please rate how strongly you agree or
links that help explain complex terms and how disagree with the statement: My experience with
the IRS was able to automatically fill some of my Direct File increased my trust in the IRS."
tax information and forms. It made me really
1%
trust the IRS and the work that you all do and • Strongly agree
helped illuminate aspects of the tax process • Agree
that have often been confusing to me." Neutral 17%

• Disagree
However, some taxpayers raised concerns about
• Strongly disagree 25Vo
trust, privacy, and data security. One said, Were
all those questions about citizenship necessary?
I have concerns about privacy and how data is
used." Another said, "I worry about information being stolen and used for other purposes.
[...] Too many IRS employees are fired." And another wrote, "I do not trust the IRS with data
anymore [...]" And another said, "I used to believe IRS will keep my tax data private, now

31
am not sure. It is very important to me that my tax data is kept private unless I give
permission otherwise."

These shifting perceptions of trust also impact Direct File's ability to recruit participants
for research, with an uptick in the number of participants who didn't respond to outreach
or attend scheduled sessions in 2025. For Direct File to continue to design with taxpayers,
the team must earn taxpayers' trust if they are to speak openly about an anxiety-
producing, deeply personal topic like taxes. The team should continue to:

• Protect participant privacy and make participants feel comfortable when they
share information about their taxes and related life situations, and

• Ensure that participants feel their data is safe with the IRS and that information
the team collects will not be used against them.

Future opportunities
The Direct File team engages with taxpayers both before and during the filing season.
Each interaction helps improve Direct File in ways ranging from making language easier to
understand to changing how questions are ordered or navigation is structured. Throughout
filing season, research findings are combined with data analytics and customer support
interactions to quickly identify and assess areas for improvement and rapid iteration.
Direct File is built with taxpayers, not just for taxpayers, and the result is a product that
both the IRS and taxpayers can have confidence in.

While some government agencies rely heavily on surveys and conduct only limited
usability testing due to cumbersome bureaucratic processes, this approach wouldn't be
sufficient for Direct File, which requires an extensive quantity of research and short
iteration cycles. The Direct File team aims to:

• Prioritize usability testing with individual taxpayers. Give taxpayers different

parts of Direct File to interact with to see where they get confused, need help, or
hit snags.
• Recruit taxpayers who represent a wide range of demographics. Engage with
taxpayers who aren't tax experts and come from a variety of backgrounds and
states. Seek out taxpayers who speak Spanish or use assistive technology.
• Do as many research sessions as possible. Answer as many questions via research
as possible.
• Take a lean approach. In each round of research, include 4-8 participants, take 2-3
weeks from start to finish, and focus on quick synthesis and next steps rather than
writing lengthy reports.
• Secure approvals for 1-3 years of research. While the norm is to apply for agency
approval for each study, this approach takes a long-term view.

32
In pursuit of these goals, the Direct File program has conducted 58 studies with more than
360 participants between its inception and May 2025.

Taxpayers continue to identify ways to improve Direct File. In the Direct File Experience
Survey, one suggested, "The difference between estimated tax payments and withholding
could have been clearer. One of those information pop ups would do just fine, explaining
what estimated tax payments are." The Direct File team implemented this suggestion.

This feedback helps the team prioritize areas that could be improved. One taxpayer wrote,
"A bit more clear language on the HSA portion would have helped." Another said, "There
was only one confusing section. It was toward the end when setting up the unique code for
next year's tax filing. [...] I think some instructions there would be helpful." Collectively,
this feedback helps the team be aware of what needs the most work. The team is
immensely grateful to all of the taxpayers who took time to participate in research or to
provide suggestions on the Experience Survey.

While the Direct File team made progress toward streamlining research approvals, the
ability to further improve this process while continuing to ensure protection for taxpayer
data would allow the team to pursue more research methods.

For example, diary studies would require Privacy and Civil Liberties Impact Assessments
and Paperwork Reduction Act approvals, and the Direct File team did not have the time
and resources to have this type of study approved in time for filing season 2025. Diary
studies could be very useful in better capturing how taxpayers prepare to file, file their
taxes, and mitigate issues such as audits, helping improve Direct File's understanding of
the full taxpayer journey.

By continuing to address inefficiencies and barriers to research in government, the Direct

File team is able to move faster as we build an even better experience with taxpayers.

33
Data Import
In the 2023 Report to Congress, the team wrote, "[Surveys and user research] suggest
that taxpayer interest in a potential Direct File tool is likely to be greater if it includes the
capability to pre-populate returns with tax information."20 While the absence of this
functionality did not prove to be a barrier to adoption, it remained taxpayers'most
frequently requested Direct File feature during the 2024 pilot

Every year taxpayers gather tax documents and manually enter that data on tax returns.
Taxpayers feel it's a task that's burdensome and unnecessary because the IRS receives
the same source documents. It's even more burdensome for taxpayers who use assistive
technology or who struggle to maintain tax documentation, such as those experiencing
housing insecurity. The burden causes stress and anxiety and can lead to data entry
errors, missing forms, and ultimately inaccurate tax returns.

Leveraging partnerships and information technology modernization efforts across the IRS,
Direct File was able to launch a robust suite of Data Import features in filing season 2025,
ahead of schedule. New for this year, Direct File offered to import:

• Biographical information like name, address, date of birth, phone number, email,
and Taxpayer Identification Number

• Identity Protection PIN (IP PIN)

• Form W-2, Wage and Tax Statement

• Form 1099-INT, Interest Income

• Whether IRS records showed the primary taxpayer received Form 1095-A, Health
Insurance Marketplace Statement

How it was built

The Direct File program emphasizes iteration, and for Data Import, the team treated filing
season 2025 as an initial experiment, retrofitting existing flows rather than rebuilding the
experience. This enabled the team to economically deliver this value to taxpayers while
rapidly learning about how to approach Data Import in the future. The team worked

20 IRS. IRS Report to Congress: Inflation Reduction Act §10301(1)(B) IRS-run Direct e-File Tax Return
System. Page 15. https://www.irs.gov/pub/irs-pdf/p5788.pdf

34
extensively with taxpayers to design Data Import and conducted six user research studies
on the feature, where taxpayers answered questions and completed tasks using
prototypes, and two additional end-to-end studies, in which the team observed taxpayers
using Direct File and Data Import to file their actual return. This direct engagement with
taxpayers is particularly valuable when introducing such a major change to the tax filing
experience.

The ability to import information returns like Forms W-2 and 1099-INT is highly prized by
taxpayers, but the Direct File team initially had concerns that only limited testing of these
features would be possible in 2025 without straining the legacy mainframe system that
stores these records. However, in January 2025 the IRS launched information return
capabilities in a cloud-based system, the Enterprise Data Platform (EDP). This new system
is designed to scale to meet the demands of Direct File, Individual Online Account, and
future IRS services, and it enabled the team to roll out Data Import to all Direct File users
over the course of filing season 2025. Table 4 shows the complete suite of Data Import
features, the dates they were launched, and the integration that powers them.

Table 4. Data Import features

Feature System First launched Available to all

taxpayers

Prior-year AGI Individual Online Account April 5, 2024 April 5, 2024

Biographical info Secure Access Digital Identity January 13, 2025 January 27, 2025

IP PIN IP PIN Service January 21, 2025 January 27, 2025

Form W-2 EDP January 21, 2025 February 13, 2025

Form 1099-INT EDP April 3, 2025 April 3, 2025

Form 1095-A Individual Online Account April 3, 2025 April 3, 2025

Direct File only offers to import data for the primary filer on the return, as this is the
person who signed in to the tool. Spouse and dependent information isn't available,
because Direct File does not yet have the ability to authenticate family members and for
them to consent to their data being imported. This could be frustrating or confusing for
taxpayers, but Direct File worked to make this limitation clear by describing the process
up front with prompts like "Why do I have to manually add my spouse's W-2 information?"
and by emphasizing whose information was being imported, such as by referring to the
taxpayer by name. In the future, Direct File could add support for verifying a spouse's
identity, further streamlining the experience of joint returns.

For additional detail on Direct File's approach to Data Import, see Appendix K.

35
Taxpayers praised Data Import
Taxpayers found Data Import to be an easy-to-use, intuitive, and welcome addition to
Direct File. One said, "The import feature which provided information already with IRS was
absolutely essential." 98% of taxpayers who were offered the option of importing a Form
W-2 chose to do so. Of taxpayers who
"The import feature which provided were offered a Form 1099-INT, 94%

information already with IRS was chose to import.

absolutely essential." Taxpayers liked that the feature saved

time and simplified their tax filing
experience. One said, "Being able to have most of the W-2 info imported is a great time
saver." Another said, "I like that a lot of the information was already prefilled so all I
needed to do was double check it was correct." Another wrote, "I like the W-2 auto fill, that
saved me at least 5-10 minutes." Another simply said of the feature, "Fast, easy, accurate."

Although further research is needed, Data Import has the potential to increase voluntary
tax compliance. One taxpayer, responding to what they liked about Direct File, said, "The
fact that it's free. Also that it imported my W-2s this year. It also knew about a tax form I
needed (1099-INT) that I didn't even know I
needed." Direct File reminded this taxpayer "It also knew about a tax form...
of an income source they had neglected, and
that I didn't even know I needed."
so the taxpayer filed an accurate return.

Taxpayers could review and correct the information; taxpayers made changes to 3.3% of
the imported Forms W-2. While some of these changes were material, such as correcting
amounts or employer information, others were superficial. One limitation of the data is that
the dollar amounts are truncated. Direct File allows for taxpayers to enter cents, but due
to the limitations of Modernized e-File, all amounts are rounded on the submitted tax
return. Some taxpayers took the time to add back in the cents; one said, "The imported
dollar amounts were all rounded down, so I had to manually edit to make them correct."
Direct File could provide guidance to taxpayers that this additional work is not necessary.

Taxpayers recognized the potential for Data Import to be

"Fast, easy, accurate."& brought to more of the Direct File experience. One wrote, "I
love the new feature to import tax documents. I wish more
were included!" One taxpayer who "liked that it imports data from other submitted
documents like 1099-INT" requested, "It seems IRS should be able to import the data from
my SSA-1099." Others were excited to try these features but were disappointed that their
information was not yet available. One wrote, "Not sure why no W-2 or 1099-R or 1099-INT
was imported to my account, very disappointed."

36
Taxpayers preparing joint returns hoped to see their spouse's information as well. One
said, "Import more tax data. Mine imported but my wife's had to be input manually." This
could have helped prevent one taxpayer from needing to file an amended return; they
reported, "I forgot to import my spouse W-2, was not alerted, submitted without attaching,
cannot go back to correct" Others recognized the benefit of even this first step, as one
taxpayer wrote, "The W-2 that was shared with the IRS by my company was imported
accurately and automatically. I loved this. My partner's wasn't, but even still it was easy to
enter the data everywhere I needed to."

Limitations of imported data

With this initial experiment, Direct File demonstrated the potential of Data Import to
transform the filing experience of most taxpayers. However, the work has also uncovered
limitations of the data that will need to be continuously improved, by the IRS and others, to
realize this transformative potential.

Data must be complete

Employers transmit Forms W-2 to the Social Security Administration (SSA). The Forms W-
2 that the IRS receives from the SSA have historically been sufficient for the IRS's tax
administration purposes, but for taxpayers'purposes, they are missing key information.
Some codes in Box 12 are missing or aggregated together. Box 14 is omitted entirely.
Boxes 15-20, which contain state and local tax information, are excluded as not relevant
for federal tax purposes, despite being critical to taxpayers for state filing purposes.

As a result, Direct File would prompt taxpayers to manually enter the missing information.
But this means that taxpayers still need to have a copy of their Form W-2 on hand, and
these fields are still vulnerable to error. A better taxpayer experience would provide
complete data, which will require work spanning both the IRS and SSA, including efforts to
modernize legacy systems and potential policy changes to facilitate collecting and storing
state and local tax information at the federal level.

Data must be correct

Sometimes imported forms had missing or incorrect data due to errors by submitters, i.e.
the employer or financial institution. Stricter validations and data entry rules on the source
submission systems could help ensure the correctness of form data.

In filing season 2025, Direct File retrieved data at the time the taxpayer started their
return; it did not import corrected Forms W-2 nor update information beyond what was
already imported. Taxpayers needed to manually edit the information if they received
additional or updated forms. For future years, Direct File might design new interaction
patterns for taxpayers to review corrections or forms received later. For taxpayers who

37
received forms after they file, there is even the opportunity to reimagine the antiquated
amended return process and reduce burden for taxpayers and cost for the IRS.

Data must be timely

Tax forms are due to the IRS at different dates during the years, as shown in Table 5.

Table 5. Selected information return deadlines

Forms Due to recipient Due to paper file to IRS Due to e-file to IRS

1099-NEC, W-2 January 31 January 31 January 31

1098-E, 1098-T, January 31 February 28 March 31

1099-DIV, 1099-G,
1099-H, 1099-INT,
1099-K,1099-MISC,
1099-R, W2-G

5498, 5498-ESA, January 31-May 31 May 31 May 31

5498-QA, 5498-SA

Despite these nominal deadlines, the IRS can receive these forms much later. The average
date of receipt for Form 1099-INT is April 13, and it takes until May 22 for the IRS to
receive 80% of the Forms 1099-INT that will be submitted in a given tax year (see Figure
9). Submitters of Form 1099-INT can request up to two 30-day extensions for the due date
to file with the IRS (this does not extend the date to furnish the information return to the
recipient). But for Direct File, these delayed submissions offer no benefit to taxpayers
attempting to file by Tax Day, let alone earlier in the filing season.

Figure 9. Cumulative Forms 1099-INT received, Tax Year 2022/Processing Year 2023

150M Tax Day: April 18,2023

80% of 10984NTs
submitted by May 22
100M

50M

Given these observed timelines, it is inevitable that many taxpayers will start preparing
their tax returns before the IRS, and thus Direct File, has received all their information
returns for the year. Earlier due dates, and stricter adherence to them, would make Data
Import more useful to more taxpayers and enable even more breakthrough experiences.

38
Future opportunities
Expanding Data Import is the biggest opportunity to continue to evolve the Direct File
experience, and the experience of tax filing, in the coming years.

• Importing all tax forms in scope for Direct File, plus information like estimated tax
payments, IRS communication preferences, and more.

• Using imported data to automatically detect tax situations Direct File doesn't
support, simplifying eligibility checking and saving taxpayers time.

• Authenticating both filers on a joint return and importing tax forms for both.

• Importing information from prior year returns, including filing status and
dependent and/or spouse information.

• Importing information from the taxpayer's Online Account to streamline payments

and refunds, including pre-filling verified direct deposit and bank information.

• Retrieving tax forms (and amended/corrected forms) in real time; enabling

taxpayers to easily supersede/amend returns when an unexpected form arrives.

• Reimagining the Direct File experience around Data Import, as the completeness
and timeliness of the data increases, to tailor the experience to the known facts of
a taxpayer's situation and further reduce the burden of filing.

39
Customer Support
For the 2025 filing season, live chat was the primary support channel for Direct File,
continuing the successful and cost-effective approach piloted in 2024. The team trained
180 Customer Support Representatives (CSRs), who handled 47,476 chats in both English
and Spanish with an Average Handle Time (AHT) of 8 minutes. The Average Wait Time
(AWT) to connect with a CSR was 44 seconds. New for this year, some questions about
eligibility for Direct File were handled by a chatbot if the taxpayer had not yet signed in.

The Customer Support team built on the solid foundations of the "one team" approach
established during the 2024 pilot to continuously drive improvements based on learnings
from taxpayer feedback. The Direct File Product and Customer Support teams were in
close communication with daily feedback loops to surface learnings gathered from both
taxpayer and CSR feedback. In collaboration with the Product team, Customer Support
was able to add 193 knowledge articles to help CSRs respond accurately to taxpayer
inquiries.

Personalizing support via Authenticated Chat

In filing season 2025, the team implemented Authenticated Chat to equip CSRs to handle
more complex taxpayer inquiries. If a taxpayer opted-in, a CSR could authenticate them to
verify their identify. This allowed the CSR to see the history of chat interactions with that
taxpayer, to troubleshoot issues by accessing the taxpayer's information in other IRS
systems, and to send secure messages to the taxpayer's Online Account to follow-up on
any issues that couldn't be resolved during a live chat session.

CSRs handled 459 Authenticated Chats during the 2025 filing season. Authenticated Chat
improved the taxpayer experience by enabling CSRs to help taxpayers understand
confusing situations. For example, a taxpayer was upset that instead of receiving a refund
as they expected when filing, the IRS had charged them money. After authenticating the
taxpayer, the CSR was able to see that the taxpayer had mistakenly reported their federal
tax withholding twice, once in the Your Jobs section and once in the Estimated Taxes
section. IRS systems caught the error, and they were sending a notice via mail of the
automatic adjustment. The taxpayer responded, "I do thank you for shedding some light."
Without Authenticated Chat, it would have been virtually impossible for a CSR to diagnose
the problem.

40
Future opportunities
Direct File's Customer Support operations relied on IRS-employee CSRs who were "on
loan" from the Taxpayer Services division. These CSRs volunteered to work on Direct File
during filing seasons 2024 or 2025, with Direct File training provided in the weeks leading
up to the opening of filing season. To mature Customer Support operations into a durable
organization and culture, Direct File envisions hiring its own Customer Support employees,
including both frontline support staff and leadership. This would unlock the ability for
CSRs to continually build and apply Direct File-specific expertise and skills over longer
periods of time than the short January-April burst of filing season. This deeper expertise
would improve the assistance CSRs provide to taxpayers. It would also allow for even more
opportunities for collaboration, integration, and cross-training with the Product team.

In the future, the team would also look to add more chat technology features that would
better equip CSRs to troubleshoot tricky cases. For example, co-browsing or screen-
sharing during authenticated chat sessions would allow CSRs to see what taxpayers see,
improving their ability to guide taxpayers on how to correct errors or their ability to
confirm and document technical issues for the Product Team.

41
Budget and Costs
Between the conclusion of the 2024 pilot and Tax Day 2025, the IRS spent $41 million on
Direct File (see Table 6), up from the $24.6 million that was spent on the pilot. This is less
than the $61.1 million budget estimate that the IRS produced following the conclusion of
the 2024 pilot, although this is partially explained by 1) the IRS halting planned work to
prepare for filing season 2026 and beyond, and 2) Direct File only being accessed by
751,235 users, lower than the 2.3 million that was projected.

However, the cost savings also reflect the Direct File team's goal of delivering more with
less. For filing season 2025, the team placed heavy emphasis on DevOps approaches to
deploying, operating, and monitoring the application, where the engineers who develop
the application are also responsible for maintaining it in production. This resulted in a
dramatic reduction in labor overhead because the same team was used for both functions,
instead of staffing separate teams at twice the personnel cost. Additionally, the
production operations team brought all on-call support work in-house, instead of relying
on managed service providers to ensure application uptime; further reducing contractor
billable hours to the project. For more information, see Appendix F.

Table 6. Direct File expenditures and disbursements, April 21, 2024 to April 15, 2025
FY 2024 Total through
$ in Millions 4/21 to 9/30 FY 2025 YTD FY 2025 YTD
Customer Service 1.1 2.5 3.6
Labor 1.1 2.5 3.6
Technology & Product 27.0 10.3 37.3
IT Labor 1.1 3.0 4.2
IT Non-Labor 23.8 3.3 27.1
Other Labor 2.2 3.8 5.9
Grand Total 28.1 12.8 41.0

A notable change from last year's spending is that the cost of services from the United
States DOGE Service, formerly the United States Digital Service (USDS), are now included
as IT non-labor, as these services were reimbursed by the IRS prior to the conclusion of
USDS's work on Direct File. The costs also include vendor support and interagency
agreements with the General Services Administration's United States Digital Corps and
18F, prior to the conclusion of 18F's work on Direct File.

42
Appendix A: Preliminary Filing Season
2025 Summary Statistics
This appendix presents summary statistics from the returns submitted using Direct File
from January 13, 2025 to May10, 2025 at 10:21 PM Eastern Standard Time.

During this time, 344,567 taxpayers used Direct File to submit 301,085 accepted returns.

Final statistics, once available, can be obtained from the Direct File office.

Filing status
count percent

Single 230,138 76.44

Head of Household 20,905 6.94

Married Filing Jointly 43,482 14.44

Married Filing Separately 6,455 2.14

Qualified Surviving Spouse 105 0.03

Total 301,085 100.00

Age of primary filer

Taxpayers must be 18 to use ID.me. The oldest taxpayer to use Direct File was 104.

count percent

18-24 59,422 19.74

25-34 91,523 30.40

35-44 48,211 16.01

45-54 38,547 12.80

55-64 38,118 12.66

65 and older 25,264 8.39

Total 301,085 100.00

43
Adjusted Gross Income (AGI)
count percent

Under $0 364 0.12

$0-$10,000 41,586 13.81

$10,001-$20,000 34,489 11.45

$20,001-$30,000 31,261 10.38

$30,001-$40,000 34,546 11.47

$40,001-$50,000 33,144 11.01

$50,001460,000 29,116 9.67

$60,001-$75,000 31,554 10.48

$75,001-$100,000 30,573 10.15

$100,001-$200,000 32,859 10.91

Over $200,000 1,593 0.53

Total 301,085 100.00

Income types
count percent

Wages 284,668 94.55

Interest income 72,747 24.16

Unemployment compensation 14,354 4.77

Social Security benefits 26,776 8.89

Retirement income 15,888 5.28

Alaska Permanent Fund Dividend 687 0.23

44
Credits claimed
count percent amount

Earned Income Tax Credit 31,961 10.62 $43,429,040

Child Tax Credit/Credit for Other Dependents 35,242 11.71 $73,716,594

Additional Child Tax Credit 9,937 3.30 $25,416,906

Child and Dependent Care Credit 4,586 1.52 $2,602,762

Premium Tax Credit 13,641 4.53 $66,505,578

Retirement Savings Contribution Credit 23,836 7.92 $4,106,870

Credit for the Elderly or the Disabled 24 0.01 $4,129

Total $215,781,879

State of residence
count eligible returns per 1,000 eligible

Alaska 853 101,000 8.4

Arizona 11,617 1,140,000 10.2

California 43,094 5,620,000 7.7

Connecticut 3,245 520,000 6.2

Florida 31,939 3,220,000 9.9

Idaho 2,284 210,000 10.9

Illinois 14,189 1,970,000 7.2

Kansas 3,146 410,000 7.7

Maine 2,043 170,000 12.0

Massachusetts 11,544 1,050,000 11.0

Maryland 6,899 870,000 7.9

North Carolina 13,256 1,670,000 7.9

Nevada 5,832 490,000 11.9

New Hampshire 2,312 180,000 12.8

45
count eligible returns per 1,000 eligible

New Jersey 10,092 1,370,000 7.4

New Mexico 2,736 300,000 9.1

New York 29,181 3,250,000 9.0

Oregon 7,236 640,000 11.3

Pennsylvania 20,009 2,140,000 9.3

South Dakota 1,319 110,000 12.0

Tennessee 10,655 800,000 13.3

Texas 40,618 4,200,000 9.7

Washington 17,863 920,000 19.4

Wisconsin 8,289 830,000 10.0

Wyoming 834 60,000 13.9

Total 301,085 32,241,000 9.3

46
Appendix B: 2025 Direct File
Experience Survey Results
The Direct File Experience Survey was an optional survey administered to taxpayers after
submitting or resubmitting a Direct File return. The survey was administered using the
IRS's Medallia platform. The questions were developed internally and administered in
English and Spanish. The survey was available from January 28, 2025 to April 24, 2025.
There were 12 questions, 10 multiple-choice and 2 open-ended, in addition to demographic
questions about income, education, and geography. All questions were optional.

The full survey yielded about 8,893 responses, 99% from English respondents and 1%
from Spanish respondents. This appendix presents results from the multiple-choice
questions.

1. Please rate your overall experience using Direct File.

count percent

Excellent 6,872 77.75

1
Above average 1,431 16.19

Average 357 4.04

Below average 84 0.95

Very poor 95 1.07

Total 8,839 100.00

2. Please rate how strongly you agree or disagree with the statement: My experience
with Direct File increased my trust in the IRS.

count percent

Strongly agree 3,596 43.64

Agree 2,033 24.67

Neutral 1,390 16.87

47
Disagree 109 1.32

Strongly disagree 1,113 13.51

Total 8,241 100.00

3a. What about this interaction made the difference? (multiple answers; asked if
respondent answers "Strongly agree" to question 2)
count percent

Direct File met my needs 3,000 85.08

It was easy to use 2,994 84.91

It took a reasonable amount of time to do what I 2,493 70.70

needed to do

Instructions were clear 2,679 75.98

Customer service employees I interacted with were 217 6.15

helpful

Other 106 3.01

Total 3,526

3b. What could have been better? (multiple answers; asked if respondent doesn't answer
"Strongly agree" to question 2)
count percent

Direct File did not meet my needs 87 4.33

It was difficult to use 137 6.82

It took too long to do what I needed to do 402 20.01

Instructions were unclear 291 14.48

Customer service employees I interacted with were 49 2.44

not helpful

Other 1,249 62.17

Total 2,009

48
4. How did you hear about Direct File? (multiple answers)
count percent

Friend or family 1,088 13.66

Web search, e.g., Google 1,511 18.97

Social media 865 10.86

News articles or programs 1,304 16.37

IRS.gov 4,476 56.18

Program that gives free help filing taxes, e.g. 150 1.88
Volunteer Income Tax Assistance (VITA), library free
tax filing program, Tax Counseling for the Elderly
(TCE)

Other 390 4.90

Total 7,967

5. Why did you choose to use Direct File to file your federal taxes this year? (multiple
answers)

count percent

I had a positive experience with Direct File last year 1,763 22.27

Direct File is free to use 6,188 78.18

I believe my filing will be accurate with Direct File 3,721 47.01

Direct File seemed easy to use 3,991 50.42

I wanted to file directly with the IRS 4,620 58.37

I believe the IRS will keep my tax data secure and 3,180 40.18
private

Other 331 4.18

Total 7,915

49
6. Did you need help with anything while using Direct File? (multiple answers)
count percent

No, I didn't need help 6,890 89.26

Yes, I chatted with Direct File customer support 262 3.39

Yes, but I couldn't find a way to get help in Direct 186 2.41
File

Yes, and I found help outside of Direct File 377 4.88

Yes, I needed help but didn't look for help 106 1.37

Total 7,719

7.On a scale from 0 to 10 with 0 being extremely unlikely and 10 being extremely likely,
how likely are you to recommend Direct File to a friend or family member?
count percent

0 = Extremely unlikely 96 1.24

1 19 0.25

2 20 0.26

3 28 0.36

4 21 0.27

5 161 2.08

6 46 0.60

7 209 2.71

8 543 7.03

9 729 9.44

10=
Extremely likely 5,854 75.77

Total 8,893 100.00

50
8. How did you prepare your federal income tax return in 2024?
count percent

I did not file last year 539 6.30

I prepared my return on paper 514 6.01

I used a paid preparer 1,181 13.81

I used Direct File 2,094 24.48

I used free software or a free online tool that was 1,619 18.93
not Direct File

I used software or an online tool that I paid for 2,223 25.99

Other 384 4.49

Total 8,554 100.00

9a. How did using Direct File this year compare to your filing experience last year?
(respondents who answered "I used Direct File" to question 8)
count percent

A lot harder 16 1.01

Harder 53 3.34

About the same 297 18.70

Easier 417 26.26

Much easier 805 50.69

Total 1,588 100.00

9b. How did using Direct File this year compare to your filing experience last year?
(respondents who didn't answer "I used Direct File" to question 8)
count percent

A lot harder 65 0.97

Harder 189 2.82

51
About the same 1,722 25.67

Easier 1,510 22.51

Much easier 3,222 48.03

Total 6,708 100.00

52
Appendix C: Preliminary Tax Year 2023
Individual Taxpayer Burden Survey
Results
The Individual Taxpayer Burden (ITB) Survey is an annual survey administered to a random
selection of individual taxpayers with stratification of tax complexity. A recruitment letter
is mailed to selected taxpayers, providing a link to the online survey and a unique PIN.
Taxpayers receive up to three reminder letters. The survey is offered in both English and
Spanish.

The Tax Year (TY) 2023 ITB included questions about Direct File, asked of taxpayers who
either used Direct File to file their TY2023 return or who lived in a state where Direct File
was offered. This appendix contains preliminary results as of September 19, 2024. Final
results, once available, can be obtained from the Taxpayer Behavior Lab in the Research,
Applied Analytics, and Statistics (RAAS) division.

Note that this data is related to the 2024 Direct File pilot, not filing season 2025. Direct File
questions will also be included in the next /TB (TY2024).

Taxpayers who used Direct File

Taxpayers who used Direct File for their TY2023 return were asked whether they agreed
or disagreed with five statements.

"Think about your experience preparing and filing your 2023 federal income tax return
using the IRS Direct File Pilot. How strongly do you agree or disagree with the following
statements:"

percent

The language used on the IRS Direct File website was Strongly agree 45
easy to understand (n=315)
Agree 42

Neutral 10

Disagree 2

Strongly disagree 2

53
percent

IRS Direct File made me feel my personal information Strongly agree 55

was secure (n=316)
Agree 32

Neutral 12

Disagree 1

Strongly disagree 0

percent

IRS Direct File gave me confidence that I was Strongly agree 55

preparing my return correctly (n=316)
Agree 29

Neutral 13

Disagree 2

Strongly disagree 1

percent

IRS Direct File saved me money in preparing my tax Strongly agree 77

return (n=316)
Agree 14

Neutral 7

Disagree 1

Strongly disagree 1

54
percent

IRS Direct File saved me time in preparing my tax Strongly agree 56

return (n=3I6)
Agree 26

Neutral 13

Disagree 3

Strongly disagree 1

Taxpayers who lived in a state where Direct File was available

Taxpayers who lived in a state where Direct File was available, but did not use it, were
asked why. The results vary based on the taxpayer's choice of tax preparation method.

"Why did you not consider using IRS Direct File?"

count percent

I did not know Direct File was available 755 29.9

I prefer to use a paid tax preparer 755 29.9

I preferred to use the same method I used in prior

547 21.6
years

I was not eligible to use Direct File 152 6.0

I didn't want to use something that is new 119 4.7

I already file for free 84 3.3

I was worried it wouldn't get me the best refund 71 2.8

I did not want to file my state taxes separately 18 0.7

I had a negative opinion of Direct File 9 0.4

I had difficulty creating my online taxpayer account

11 0.4
or using the software

I filed my taxes before the Direct File pilot became

8 0.3
available

Total 2,529 100%

55
"Why did you not consider using IRS Direct File?" by TY2023 preparation method

Paid preparer Software Self-paper

(n=1,599) (n=944) (n=147)

I prefer to use a paid tax preparer 45.0% 2.9% 3.4%

I did not know Direct File was available 23.3% 36.3% 23.8%

I preferred to use the same method I used in

prior years 18.1% 21.9% 34.0%

I didn't want to use something that is new 3.7% 4.0% 13.6%

I was not eligible to use Direct File 2.9% 9.2% 11.6%

I was worried it wouldn't get me the best refund 2.7% 2.8% 1.4%

I already file for free 0.9% 6.0% 8.2%

I did not want to file my state taxes separately 0.5% 1.1% 0.0%

I had a negative opinion of Direct File 0.3% 0.3% 0.7%

I had difficulty creating my online taxpayer

account or using the software 0.3% 0.6% 0.7%

I filed my taxes before the Direct File pilot

became available 0.2% 0.5% 0.0%

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Appendix D: 2024 Taxpayer Experience
Survey Results
The Taxpayer Experience Survey (TES) is an annual survey administered to a random
selection of individual taxpayers who filed a 2023 federal tax return in 2024, regardless of
whether they received assistance directly from the IRS for tax-related issues. The TES
covers many topics, including tax return preparation, tax filing, paying taxes and receiving
refunds, and awareness and use of channels for contacting the IRS. The responses reveal
taxpayers' experiences, needs, and preferences in order for the IRS to improve its service
and taxpayers' satisfaction and compliance.

The survey was administered to 4,541 individual taxpayers who filed a 2023 Federal tax
return in 2024. Participants were randomly selected using NORC's AmeriSpeak panel21 to
obtain a representative sample of taxpayers covering approximately 97% of U.S.
households, with an additional oversample of Spanish limited English proficiency (LEP)
taxpayers. Respondents could take the survey online or by phone, in English or Spanish.
The survey was conducted from June 21 to August 12, 2024. All results were weighted by
age, race, education, gender, region, household income, filing status, and tax preparation
method to accurately reflect the demographics of the U.S. population.

The 2022 TES included questions about Direct File that informed the 2023 Report to
Congress.22 The 2024 TES again included questions about Direct File to measure any
change in taxpayer perception following the 2024 pilot. Those questions are excerpted in
this appendix.

Note that this data is related to the 2024 Direct File pilot, not filing season 2025.

10. "The following questions are about your awareness and perceptions of Direct File, an
IRS-provided, free online tool to prepare and electronically file (e-file) your federal tax
return directly with the IRS. Direct File includes features such as safe-guards to protect
taxpayer data, ease of accessibility, and 'interview-style'preparation (meaning the tool

21 NORC at the University of Chicago. "AmeriSpeak: NORC's Breakthrough Panel-Based Research

Platform." https://www.norc.org/Research/Capabilities/Pages/amerispeak.aspx
22 IRS. IRS Report to Congress: Inflation Reduction Act §10301(1)(B) IRS-run Direct e-File Tax Return
System, Publication 5788 (5-2023) Catalog Number 93968P. https://www.irs.gov/pub/irs-
pdf/p5788.pdf

57
asks tax-related questions to fill in the return), in multiple languages, with access from
mobile devices. Direct File was released as a pilot program in the 2024 filing season and
was available to a relatively small number of taxpayers, but you might have heard about
it even if you didn't use it. Did you hear anything about the IRS Direct File program
described above during the most recent filing season?"
(n=4,5I2) percent

Yes 19

No 61

Not sure 20

11. "Where did you hear about the IRS Direct File program? Select all that apply." (asked
if respondent answers "Yes" to question 10)
(n=824) percent

IRS.gov 42

A local or national news outlet 34

A friend or family member 22

Social media 22

Other 6

12. "Based on what you've heard, what is your impression of the IRS Direct File
program?" (asked if respondent answers "Yes" to question 10)
(n=820) percent

Very positive 28

Somewhat positive 35

Neutral 33

Somewhat negative 3

Very negative 1

58
13. "Based on the description you've just read, how do you feel about the IRS offering a
free online tool like the Direct File program for preparing and e-filing federal tax
returns?" (asked if respondent answers "No" to question 10)
(n=2,832) percent

Very positive 26

Somewhat positive 35

Neutral 34

Somewhat negative 5

Very negative 1

59
Appendix E: Ways of Working
Direct File is composed of a blended team that includes government employees and
contractors from skill areas such as product management, design, engineering, tax law
expertise, and data science. The Direct File team followed best practices in agile
methodology, human-centered design, and iterative development. The team was able to
scale, yet stay grounded, due to shared ways of working and alignment on methods for
designing and building software.

These ways of working not only helped deliver Direct File, they may also be a useful
reference for other teams looking to efficiently deliver effective government services.

Establishing the foundation for a healthy team

The initial Direct File team of eight people wrote the following statements to establish
fundamental ways of working that established how the future team would operate.

• We are collaborative.
There's not a single problem that can be solved by one person or by one discipline
area.

• We design with taxpayers, not for taxpayers.

Our content and design decisions are directly informed by conversations and
usability sessions we do with real taxpayers. Every research session aims to
answer the question "Was the taxpayer able to accurately and confidently answer
the question?"

• Content is the design.

Content and design are intertwined. UX writing and plain language are key.

• We exclusively design for the mobile experience.

We design at mobile dimensions because it forces us to keep the design patterns
simple, the content short, and helps stakeholders understand the constraints.
Using simple patterns helps make coding easier, which makes it easier to code for
accessibility.

• Good design is design that works for everyone.

We are 508 compliant and beyond. Direct File is designed and tested with
taxpayers who have a variety of attitudes, aptitudes, abilities, and access needs.

60
• Filing in other languages should be just as easy as in English.
Translations will be done with the same UX writing attention given to the English.
Translated interfaces will be tested with native speakers.

• Progress, not perfection.

Every new feature is a Minimum Viable Product (MVP) — we constantly look for the
minimal version of a solution, then build from there. The next version of Direct File
is the best version of Direct File.

• We use lean and sustainable processes.

We always have a short timeline so we need to be thoughtful about when to work
scrappy and when to build out an elaborate process. Balance what you need now
and what the future version of this team will need.

Building the team

As the team grew from 8 to about 75 people, the team structure also had to evolve while
remaining relatively flat to ensure that everyone felt empowered to have ideas, identify
problems, lead their area, and make decisions. Here are the three ways Direct File
leadership thoughtfully built the team:

1. Kept the structure as flat as possible

• Sprint team level: Individual contributors, led by a design lead, product manager
and technical lead. A few sprint teams followed a different structure because they
focused on functional areas that touched multiple parts of the product, like user
research, data and analytics, and quality assurance.

• Group level: Senior design, product, and engineering leads responsible for the
output and delivery of several teams'worth of work. In 2024, Direct File had three
groups: tax logic (responsible for tax return preparation), tax systems (responsible
for tax return submission, submission processing, and post-submission
experience), and a Customer Support group.

• Organization level: Directors of user experience, product, engineering, and

operations. Responsible for the output and delivery of the entire Direct File
organization. Each director manages respective functions at both the group and
team level and coordinates with Customer Support leadership.

• Direct File leadership: Responsible for the delivery of the Direct File product as
well as stakeholder relationships including the IRS product organization, Customer
Support, Procurement, general operations, policy, and planning.

61
2.Hired senior-level contributors with generalist and specialized skills

The complexity of building Direct File requires both technical knowledge and design savvy
to turn tax code into something easy to use. The team aimed to maintain a 50/50 ratio of
UX to engineering and to have a product manager embedded on each sprint team.

3. Empowered sprint teams

While sprint teams had a list of goals for adding new scope or features (e.g., "add Form
1099-R"), they purposely did not have detailed requirements. Because they were the
experts on how to build Direct File, they were encouraged to spend time understanding
the goal and how to accomplish it. Teams were responsible for making trade-off decisions,
executing their plans, or alerting leadership if and when a feature should be cut. This team
empowerment was enabled by easy access to leadership through daily communications
and a weekly leadership office hour open to everyone.

Collaborating on product vision and delivery

The Direct File team worked collaboratively across design, product, and engineering
functions to ensure taxpayers'goals, experiences, and needs were prioritized. Team leads
strategized and problem solved as a group to guide the decisions of the entire cross-
functional team. As a result, Direct File delivered a targeted tax scope, prioritizing
taxpayers'goals, and is available in both English and Spanish.

Each core discipline played a critical role in achieving these goals:

• Designers led work to understand taxpayer needs, learned complex tax law, then
translated that knowledge into easy-to-use designs. Design oversaw research with
real taxpayers to determine what taxpayers needed to complete their taxes
accurately and on time. They also worked on the information architecture and user
experience (how taxpayers navigate through and experience Direct File) and
content design (how taxpayers understand complex tax logic through plain
language).

• Product managers prioritized features and bridged business objectives with

implementation feasibility. To help establish and track delivery and growth goals,
they asked questions like: Does this meet the organization's mission? What
resources are needed to meet these goals in an appropriate time period? How do
decisions inform Direct File's short-and long-term roadmap?

• Engineers provided technical feasibility insights early in the design process,

preventing rework later in development. They determined the approach for
building Direct File by looking at the complexity of features and system

62
sustainability and scale. Engineers worked closely with product to weigh technical
feasibility against the taxpayer needs and overall mission, goals, and timeline.

Collaborative efforts across teams are successful due to a shared understanding that the
Direct File team should move with care around things that matter. Taxpayers are people.
This is their money and their lives. There are real-world consequences if Direct File doesn't
work for them. Together, through frequent check-ins, these teams build the overall vision
for Direct File—ensuring it solves the right problems, for the right people, the right way.

Implementing agile methodologies

Agile development is the seamless collaboration between designers, engineers, and
product managers, with a heavy emphasis on changing requirements when necessary, and
cutting scope if needed to ensure delivery. The Direct File team used agile to continuously
iterate on product features through rapid feedback loops.

Sprint cycles began with Sprint Planning, where the team estimated the work of individual
tasks based on their priority. During the sprint, daily stand-ups facilitated transparency
and unblocked issues. At the end of each sprint, the team conducted a Sprint Demo,
showcasing completed work to stakeholders, followed by a Sprint Retrospective to reflect
and improve future workflows.

Sprint ceremonies

To maintain a structured and effective workflow, sprint teams participated in several agile
ceremonies that created alignment, facilitated continuous improvement, ensured the team
worked on high-priority items, and identified risks.

• Daily Standup (15-30 minutes)-A short meeting where sprint team members
discuss what they accomplished yesterday, what they plan to do today, and any
blockers they are facing. These can also be accomplished virtually through Slack,
where team members share the same information asynchronously.

• Biweekly Sprint Planning (Week A before the new sprint begins)-The sprint team
collaboratively plans the next sprint, prioritizing tasks from the backlog and
estimating work effort.

• Biweekly Backlog Refinement (Week B during the middle of the sprint)-A session
to review and groom the backlog, ensuring that upcoming work items are well-
defined and prioritized.

• Monthly Retrospective (Review of past 2 sprints)-A reflective meeting where the

sprint team discusses successes, challenges, and areas for improvement over the
last two sprints. When multiple sprint teams collaborate, this retrospective will
include all respective teams.

63
Tools and Collaboration

The organization relied on a modern toolset to streamline development and collaboration:

• GitLab for issue tracking and sprint backlog management.

• GitHub for version control and code repository management.

• Mural for brainstorming and collaborative ideation.

• Figma for detailed design specifications, wireframes, and user interface mockups.

These tools enabled real-time collaboration across disciplines, ensuring designs,

development tasks, and product objectives remained aligned.

Incorporating taxpayer feedback into the product roadmap

Taxpayer feedback played a crucial role in shaping the product roadmap. Feedback was
from user research, customer support chat, and surveys. Collectively, this input was used
to:

• Identify common support requests: Recurring themes in live chats highlighted

usability issues and feature gaps.

• Prioritize based on impact: Urgent or high-friction issues surfaced through chat

were added to the sprint backlog for quick resolution.

• Validate feature ideas: Before major features were built, teams engaged with
customers directly to gauge interest and refine requirements.

64
Appendix F: Engineering Approach
Software engineers played a highly collaborative and critical role on the Direct File team.
Working closely with designers and product experts, engineers balanced technical
feasibility against taxpayer needs and found sustainable and scalable approaches for
building Direct File. To maintain high-quality software development and operational
efficiency, Direct File engineers followed a set of best practices:

• Blended production operations model: The engineering team used Datadog and
PagerDuty for high-availability monitoring, with a blended development and
operations model, where engineers developing the application also participated in
product operations including release and incident management.

• Technical proficiency: Engineers were expected to have working knowledge of

Java, JavaScript, React, and SQL, ensuring cross-functional expertise across the
stack.

• Automated and frequent deployments: The team deployed weekly from May
through December and increased to at least twice per week during tax filing
season from January through April, leveraging a fully automated deployment
pipeline.

• Cost optimization mindset: Application and infrastructure costs were reviewed at

least semi-annually to identify areas for cost reduction while maintaining
performance and reliability.

• Data-driven decision making: Engineers collaborated closely with the Data and
Analytics team to measure business impact rather than relying on siloed insights.
Engineers were expected to draw their own insights and not rely on simply asking
Data and Analytics for answers.

Architecturally, the team aligned technical decision making on a small set of general
principles, aiming for systems that are:

• Fault tolerant

• Self-adaptive

• Self-healing

• Anti-fragile

65
Blended production operations team
A blended production operation is one where the engineers who develop and deploy the
application are also the ones who operate and manage it in production. This typically
involves three interlocking sets of activities:

• Site reliability engineering (SRE): Work by the on-call engineer to investigate and
remediate problems that occur in the application. This includes usage of
monitoring and observability tools as well as day-to-day engineering practices to
maintain system reliability.

• Release management: Work by the application and DevOps teams to deploy a

build to production, including both scheduled and unscheduled (hotfix)
deployments. This includes application development, release testing (both
automated and manual), and security.

• Incident management: The processes followed by all members of the organization

to remediate issues and incidents. The policies are provided by the IRS's Enterprise
Operations and Information Technology Operations Command Center and
implemented by Direct File.

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66
Prioritization
The following guidelines were used to prioritize bugs and incident responses that arose
during the filing season. For the below, the Direct File team deployed weekly releases.

RO: Emergency hotfix, needs to ship as soon as possible

• You can't submit or export a tax return for >1% of submissions

• Refund or amount due calculation is incorrect and we know taxpayers are being
affected by the issue

• Security incident or Personally Identifiable Information (P11) is exposed

• Direct File is down or significantly degraded

• High traffic feature is broken or not available, and no workaround

• We are importing data that isn't in the data source and showing it to taxpayers

Ri: Now, showstopper fix for the next immediate release

• High traffic functionality is broken with a difficult or time-consuming workaround

• Medium traffic functionality for a smaller percentage of taxpayers is broken with

no workaround

• Submissions or exports are blocked for <1% of taxpayers

• Direct file performance is degraded

• Refund or amount due calculation would be incorrect, but circumstances to trigger

the issue are rare enough that taxpayers are unlikely to be affected before a
scheduled release

R2: Next, fix for the scheduled release following the next immediate release

• High value taxpayer experience improvements; a medium, high, or very high traffic
feature has confusing functionality with a workaround

• Low traffic functionality is broken for a small percentage of taxpayers

R3: Later this filing season

• Usability feedback (via customer support or other sources); improves a medium

traffic feature but there is a current workaround

• Low traffic functionality is broken for a smaller percentage of taxpayers

R4: Consider for this filing season

67
• Nice to have usability improvements; functionality not needed to perform daily
work and is not time sensitive

R5: Backlog for future filing seasons

• Unlikely to get to these; low impact improvements

On-call staffing
All engineers remained on their sprint teams throughout the 2025 filing season. On-call
capacity planning factored into sprint planning. Within the engineering organization of 30
individual contributors, an 80:20 development to operations commitment looked like this:

• A core on-call rotation consisting of 12-15 engineers; each member of this core
team will be primary and secondary at least once.

• 15-18 engineers whose main priority throughout the filing season is feature
development but can be pulled into incident management and remediation during
business-hours as needed. These engineers staff the shadow on-call rotation,
discussed more below.

• For a given week, there would be:

o 1 primary on-call who is 100% focused on monitoring the application and

responding to alerts. Primary on-call is able to respond to a page and
access Government-Furnished Equipment (GFE) within 15 minutes at all
times. Primary on-call should solely focus on monitoring the application,
triaging bugs, working with Customer Support, etc.

o 1 secondary on-call, who is available to respond to an incident or escalation

in a timely manner but is otherwise focused on reliability and operations
work. Secondary on-call is able to respond to page and access their IRS
GFE within 30 minutes at all times. Secondary on-call should focus on Site
Reliability Engineering (SRE) work, with the understanding that they should
drop what they are doing at any moment if they are paged or if the primary
needs support.

o 1 shadow on-call, who should be looped in during debugging and incident

remediation similar to the secondary but otherwise focused on feature
development. This role is to enable newer members of the team to gain
exposure to Production Engineering such that all engineers go on-call, in
some capacity, during the 2025 filing season.

o Group leads are paged either if both the primary and secondary are not
able to acknowledge the page, or if broader escalation is required and
decision makers need to be looped in or woken up.

68
o 26 engineers focused on feature development but could be pulled into
incident management and remediation during business-hours as needed.

• Active on-call: 10 AM -10 PM ET (dependent on Customer Support hours and

release management schedules). Alerting via PagerDuty is available 24/7, including
overnight and weekends.

• Different Direct File groups dedicated to various parts of the product scope or
features may each have their own service in PagerDuty and staff separate on-call
rotations.

o The Production Engineering leads handle the coordination admin with each
group lead and update the PagerDuty schedules as needed (e.g. scheduling
overrides).

• Eligibility

o Engineers eligible for on-call must have IRS GFE and the requisite
entitlements to access all monitoring and observability tools.

o The Production Engineering team leads are responsible for training,

documentation, shift scheduling, and meetings.

o The Production Engineering leads coordinate with group leads and Ops
lead to ensure that all engineers are eligible by January 15.

• Shift scheduling

o Similar to the 2024 filing season, primary and secondary shifts were each 7
days.

o Monday morning includes a review of the past week of Production

Engineering, items to monitor, issues outstanding, etc.

This schedule allows half of the engineering organization to go on-call at least once as a
primary and secondary.

69
Appendix G: Accessibility Beyond 508
Compliance
To make Direct File available to taxpayers who use assistive technology (AT), accessibility
expertise was essential to our agile development and design practices. As a result, Direct
File exceeds the requirements in Section 508 of the Rehabilitation Act while also
complying with the highest standards of the web content accessibility guidelines (WCAG).

Multiple rounds of end-to-end testing with AT users confirmed this industry-competitive

user experience. Testing uncovered zero accessibility bugs and exceeded users'
expectations for all websites, not just tax filing software. One participant who relied on
speech input said, "It's better than a couple of the sites I use on a daily basis."

Another participant, an expert AT user, completed a mock simple return in less than 30
minutes, including time spent thinking out loud and answering research questions. They
estimated they'd spend closer to 15 minutes completing a Direct File tax return on their
own and not in a research setting.

Every Direct File engineer and designer had basic accessibility knowledge, and at least
one person anchored that work on each team. The team approached accessibility from a
systems perspective, so it wasn't just another to-do item on a checklist. Creating 508-
compliant components and having a design system with reusable parts meant the team
didn't constantly need to worry about bugs. Once a component was 508-compliant, it
would be suitable for everyone. The component would only need to be re-evaluated or
updated if the team introduced a new design new pattern.

To support the team's growth, detailed documentation was available on a wiki that
everyone could access and update as we learned new information. The wiki also included
links to trusted resources from the Information Resources Accessibility Program (IRAP),
which is the IRS's accessibility program office. Three team members held federally
administered Trusted Tester certifications and formed an Accessibility Resource Group to
coach other teams and review code changes for conformance. Finally, the team celebrated
everyone's accessibility contributions in weekly all-hands meetings, raising both
awareness of accessiblility work and publicly appreciating those who did the work.

The Accessibility Resource Group relied on GitHub's Pull Request (PR) template feature to
ensure accessibility. When reviewing code, each engineer saw the same prompts. For
example:

70
Does it work across multiple screen sizes?

Can it run on a slow internet connection?

Is everything accessible by a keyboard and screen magnifiers (e.g., for low-vision

users) and by speech input (e.g., for those with dexterity impairments)?

• Do multiple screen readers work as expected (e.g. JAWS and VoiceOver)?

This checklist supported efficient review processes and ensured that new accessibility
issues weren't accidentally introduced. A culture of constant improvement, rather than
waterfall-style lockstep development, helped to catch and address any new issues that did
make it through.

Additionally, the certified Trusted Testers conducted end-to-end reviews to catch any
issues missed through the PR process. Over time, fewer and fewer bugs made it through,
demonstrating this effort's success.

Finally, the team conducted end-to-end usability testing with people with disabilities.
Researchers on the Direct File team prepared and facilitated these sessions, further
distributing accessibility knowledge across the organization. The sessions didn't uncover
any 508 violations, and participants were extremely impressed by Direct File's usability.
One participant, using a screen reader, remarked that Direct File is, "Very accessible. Very
user friendly. Did a nice job of explaining step-by-step."

Another user shared, "I design many forms for my job and conduct accessibility audits of
them, and this entire experience just made my heart leap for joy. A few years ago, I was
brought nearly to tears the first time I filed my taxes with paper forms. Since then, I've
studied a range of best practices and standards for easily usable and accessible online
form design, and this Direct File system nailed every single one of them. I am so beyond
impressed, and I sincerely hope this program continues and expands in the future."

Recommendations for teams

Our recommendations are applicable to any organization inside or outside of government.
They are:

1. Set SMART goals for both code and culture

2. Frame accessibility as an advantage for everyone

3. Treat 508 problems as high-priority bugs

4. Distribute responsibility for accessibility

71
1.Set SMART goals for both code and culture
Start with a strong, strategic vision to build support and prompt action. By setting SMART
(Specific, Measurable, Achievable, Relevant, and Time-bound) goals for Direct File, the
team's accessibility goals weren't just a box to be checked. Instead, the team was able to
build a culture of peer reviews, coaching, and transparency, making accessibility a skillset
for the entire team, not just one practitioner. This is an essential part of building an
iterative, human-centered culture for software development.

2.Frame accessibility as an advantage for everyone

A culture of accessible software development is critical for usability for people with
disabilities. It also makes software easier for everyone to use. In the real world, for
example, a curb cut from the sidewalk to the street helps wheelchair users cross the
street easily. It also helps parents with a stroller, kids on bikes, or someone with a knee
injury. Accessibility is as much a part of good user experience as color choice, layout, and
plain language.

Direct File is both accessible and usable, supporting all the ways users interact with digital
content on the web, whether those users require screen readers, have mobility or cognitive
issues, are accessing the tool from a slow internet connection, or any combination of
these.

For example, Direct File asks just one question per page to reduce stress, save progress
after each answer, and ensure the necessity of each question based on past responses.23
This helps everyone. It also helps people who use screen readers by reducing the
complexity of page content, and it reduces sensory and information overload for people
with cognitive disabilities. Direct File also relies on plain language, which helps everyone
understand complex tax law while also supporting people with reading disabilities or low
English proficiency. As a result, content is easier to understand while also reducing the
burden on customer service agents who are often asked to explain complex concepts.

3. Treat 508 problems as high-priority bugs

When accessibility applies to everyone, it becomes easier to prioritize problems and
enhancements, and harder to sideline problems that only affect a small number of users.
As part of the Direct File development process, accessibility problems were tracked as
bugs, just like any other system feature. Section 508 violations were highly prioritized, and
all issues were refined with design and engineering to understand how to resolve them.
This, combined with efforts to distribute knowledge throughout the team, led by

' For more information: Department of Veterans Affairs, "Ask users for... A single response."
https://design.va.gov/patterns/ask-users-for/a-single-response

72
accessibility experts, ensured Direct File launched with no major accessibility problems
from day one.

4. Distribute responsibility for accessibility

Accomplishing this level of accessibility requires an integrated team. With just one, or
even a few, accessibility experts supporting reviews, reports, refinement, and fixing bugs,
Direct File would have been able to meet only the bare minimum standards for
governmentwide accessibility. Additionally, a siloed approach runs the risk of turning
accessibility into an afterthought, resulting in a worse user experience for everyone.
Instead, everyone on the Direct File team was responsible for thinking about accessibility
from day one, which ensured the program exceeded those standards.

73
Appendix H: Design and Content
Approach
Translating tax concepts into plain language
Direct File translated tax code into simple questions that most taxpayers could answer
without extra help. The language in Direct File had to be simple but dynamic enough to
accurately reflect tax logic and tax law. Concepts needed to be explained in familiar,
friendly language while also being written in a way that got the most accurate responses
from taxpayers. This approach also helped educate taxpayers throughout the process,
increasing their confidence and earning their trust while ensuring they submitted
complete, accurate tax returns.

In order to realize the plain language of Direct File, the team needed to:

• Establish a collaborative partnership with tax experts

All the language in Direct File needed to be cleared for accuracy by tax experts
and tax lawyers. Over the course of two filing seasons, the Direct File team
established early alignment with subject matter experts around the benefits of
plain language in Direct File. This alignment helped develop a shared
understanding of the content challenges that come with designing for such a
complex space.

The team also embedded IRS tax experts within product development practices.
With contextual knowledge of Direct File's goals, progress, and blockers, subject
matter experts were able to offer contextual support when and where it was
needed most. It was also critical to create a shared content review process that
included subject matter experts. By requesting collaboration and review early in
the design process, content strategists were able to quickly learn about tax law
and tax logic and help inform design decisions throughout Direct File. The team
engaged in weekly touchpoints with tax experts, and these meetings provided a
chance to surface questions, collaborate on problems, and reduce bottlenecks in
the review process.

• Research tax concepts and iterate on designs

To translate tax concepts into plain language, the design team first combed
through IRS tax forms, instructions, and publications to learn about the tax filing
scope that Direct File supported. Content designers then paired with user
experience designers to wireframe and co-design the questions and screens

74
needed to accurately complete specific tax forms. Once the team had wireframed
a set of tax questions or screens, they'd bring the drafted content to dedicated tax
experts at the IRS Office of Chief Counsel (OCC) for a review. Taking OCC's
feedback into account, the content and user experience designers worked on the
question language and repeated this process until they got it right.

• Let complex information unfold

Providing the right amount of information at the right time can reduce cognitive
load and make difficult tasks easier to complete. The team used a progressive
disclosure approach to content, which allowed taxpayers to dig deeper for more
information as they needed it, without overwhelming the screen with text. After
using Direct File, taxpayers said that it reduced the stress that's typically involved
in doing taxes and increased their confidence in the results.

"It was a wonderful experience. I usually feel overwhelmed, but this made it
easy, and I could take my time and concentrate."
"Everything on the screen was helpful and informative, not overwhelming, so I
feel like I both did things right AND understood what was happening."

Spanish translation
Spanish is used in 62% of non-English speaking homes in the United States, so the Direct
File team prioritized offering Direct File in both English and Spanish.24 Taxpayers can
access every part of Direct File in Spanish, with just a click of a button.

Spanish-language experts worked closely with the Direct File design team and IRS tax
experts to translate complex topics into plain language. All Spanish content aimed for a
sixth-grade reading level and used region-agnostic Latin American Spanish. Spanish-
language experts also maintained documentation for how design decisions and translation
decisions were made.

The Direct File team conducted Spanish-speaking research studies throughout the filing
season. The team made product recommendations based on the experience of Spanish-
speaking filers and verified the product's usability across a variety of regional dialects.
Research participants frequently cited their surprise and delight with being asked about
their experience. Through these sessions, the team confirmed that Spanish-speaking

24 According to census.gov, Spanish is the most common non-English language spoken in US homes,

being used by 62% of non-English-speaking homes. This is 12x the second most frequently spoken
non-English language, Chinese. An estimated 13% of the overall population of the US speaks
Spanish at home.

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filers had an overall positive experience, understood the material, and were able to
successfully navigate the application.

"Siento mas confianza, el proceso es claro y organic° [I feel more reassured, the
process is clear and organic]"
"Me gusta que este en espafiol" [I like that it is in Spanish]"
"No se me ocurre algo que mejorar asi esta increible [I can't think of anything to
improve, this is incredible]"
Managing Spanish content
The translation process for filing seasons 2024 and 2025 included running a script that
pulled readable English content from the backend Direct File code and putting that
content into a spreadsheet. Translators would then manually translate the content in the
spreadsheet, and engineers would run another script to insert the Spanish content back
into the code. There were several challenges with this process:

• Only a handful of engineers knew how to execute these scripts. This became a
bottleneck as more content needed to be translated closer to the start of filing
season.

• Some spreadsheets included more than 70,000 words that needed translation,
many of which were duplicative words and phrases.

• Content was also duplicated across multiple spreadsheets, which led to

inconsistency in word choice and phrasing.

Due to these challenges, the Direct File team piloted a new approach to translations for
filing season 2025. The team tried a tool called Weblate, which had a steep learning curve
and presented challenges late in the development cycle. The team ultimately reverted to
the manual batching process.

What would the team do differently in the future?

Overall, Direct File was able to represent complex tax information to many taxpayers who
are more comfortable filing their taxes in Spanish. To sustain and scale the translation
efforts, the team recommends using a translation management tool.

The right translation management tool would provide the following benefits:

• Efficiency: Increase speed by providing matches with existing translations and

limiting the need for duplicate or repeat translations.

• Sustainability: All content lives in one place, reducing time spent managing
documents and versioning. All translators have access to the same information.

76
• Consistency: Every translator can access previous translations done by other team
members, ensuring everyone uses the same terminology.

• Accuracy: Any updates to the English source content will automatically trigger a
notice for translators to update the Spanish content accordingly.

The Direct File content and design workflow

To meet readiness standards, the Direct File content and design workflow supported
iterative development from draft designs to final readiness for every screen in the product.

For filing season 2024, due to Direct File's limited tax scope, the team was able to check
the tax accuracy and launch readiness of the whole experience. For filing season 2025,
Direct File's tax scope increased significantly, along with the number of people on the
team involved in drafting and updating screens. Ensuring launch readiness was a larger,
more complex problem.

This was anticipated. At the end of filing season 2024, design and engineering worked
with team members and IRS's Office of Chief Counsel (OCC) to figure out what worked
well, what didn't, and identify opportunities for improvement. Processes for filing season
2025 needed to be:

• Well-defined with a clear order of operations

• Easy to use, run, and scale

• Visible in shared tools so people working on screens concurrently were aware of

screen readiness

• As efficient as possible while preserving the things that made Direct File a success
in 2024

Each quality check in this new workflow included a new or expanded process, and points-
of-contact assigned for completing reviews. Accuracy, functionality, and fit checks
included:

• Tax accuracy review: The Office of Chief Counsel (OCC) reviewed for legal
accuracy in all public content (e.g., screens, customer support content,
notifications) and logic flows. The Direct File team used Gitlab to request legal
reviews, and OCC would circulate the designs for legal review and return final
comments to Direct File in Gitlab. As needed, OCC also participated in the design
process, providing input on content flow, information reporting, and more. OCC
also fielded ad hoc tax law questions and located the most knowledgeable experts
to assist. By applying individual tax law expertise and finding and coordinating
with IRS subject matter experts, the team ensured that Direct File correctly
presented and applied tax law.

77
• Editorial review: With many different people working on content, editorial reviews
ensured the team followed content guidelines for plain language and consistency.
It was important to ensure Direct File felt like one product with one voice to provide
an effective and credible experience for taxpayers. Direct File's content team ran
the editorial review process, using a Gitlab ticketing system for intake.

• Design cohesiveness review: This review ensured that new tax scope and screens
remained true to Direct File's vision and provided a seamless experience. The
design team checked each addition against documented heuristics for re-using
information, question order, information architecture, pattern consistency,
appropriate fit for new interactions, and countless other details. Direct File's
product design team ran this process,
Readying screens for launch
using a Gitlab ticketing system.
Design new screens
• Translation check: This process was a tom tax into designs. Watt Content test Concepts.
colabof ate mot Chief Coonsel SIAEs as needed

combined translation and language Mote

Submit for internal reviews
review step. Translators checked OF Design COACKiveneSS review
OF Eddcrn,t Conwstoncy review

language for consistency across the

product in Spanish and suggested
improvements to the English version
where it would make both English and
Submit for Chief Counsel Teo Accuracy review
Spanish translations clearer.
SCREEN CONTENT APPROVED

• Quality assurance (QA): This last step

Submit screens for Spanish translation

ensured designs and tax logic were

faithfully implemented. This dedicated
Submit for OA testing
check ,mplementation tor conedt tax log.. math, content
and desqns

QA team coordinated both product-

Complete engineering
wide and ad hoc testing. This was the hug fiWS. 005nXII0(INflOrtlQA

biggest, most intensive step for

reaching launch. Ready

Future opportunities
The launch readiness workflow got the Direct File team to filing season 2025 launch day
with confidence in the accuracy of the product while preserving the things that made
Direct File, Direct File. There were challenges and lessons for the future, too.

• Improving OCC Review: Reviewing all content for legal accuracy and assisting
with legal questions around new scope was a challenge. Multiple people were
involved in each review, and it was sometimes difficult to find subject matter
experts to assist given their other responsibilities. Weekly check ins with OCC and
Direct File leadership helped achieve alignment, and in the future, the Direct File
team could provide early scope expansion awareness for OCC. Additionally, IRS

78
Tax Forms and Publications could join this review and design team. Better
coordination between design and customer support would also alleviate some
duplicative reviews for similar topics—for example, coordinating reviews for new
Health Savings Account screen content and customer support knowledge articles
on this topic.

• Improving Spanish translation workflow: Translations are dependent on finalized

English content, resulting in a bottleneck for review right before launch. This was a
significant amount of work to complete in a relatively short period of time. A
continuous, year-round development cycle would spread these requests out. In the
future, designers, translators, and product managers might also consider sharing
smaller pieces of English content earlier or translating content drafts in parallel
with the design roadmap. This may require content management or translation
tools.

• Scaling QA: The team needed to test complex tax law with only a few experts
available. For filing season 2025, the Direct File team designed a QA process that
even non-experts could complete in meaningful ways. The design team built out
this process, created building blocks and documented testing plans. This is an area
that should be scaled further in the future.

• Workflow awareness: During filing season 2024, the team learned that it was
essential to easily check each screen's progress toward launch readiness. To
support this, the team designed an internal interface for workflow visibility, but
building it would've required far more development capacity than was available for
filing season 2025. That said, the team was able to use some manual processes to
do this. To make workflow awareness more reliable in the future, the team would
need to tie the completion of the review processes automatically to the internal
interface that reports each screen's status.

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Appendix I: Insights to Action
The Direct File team used human-centered design both prior to filing season to inform the
scope and direction of the product and during the filing season to identify areas for
improvement while taxpayers used the tool.

Tax filing season is only a few months long, but learning directly from taxpayers'real life
experiences while they're actively using Direct File provides a true measure of product
performance as well as a unique opportunity to quickly respond to issues and correct
them. The team used a Lean UX methodology to do this, monitoring data streams that
track live use, quickly identifying issues, deploying experimental solutions, and measuring
how well that mitigates problems.

Insights to actionable results

During filing seasons in 2024 and 2025, the Direct File team was able to quickly,
incrementally respond to problems in the taxpayer experience. Here are some actions the
team took during the 2025 filing season.

Decreased the number of taxpayers mistakenly reporting estimated tax payments

Early in the 2025 filing season, end-to-end usability testing and Customer Support chats
showed that many taxpayers weren't sure how to answer "Did you pay any 2024 estimated
federal taxes to the IRS?" And, of the roughly 5% of Direct File users who reported
estimated taxes through mid-February, nearly 30% entered the same number as their
federal withholding amount. These taxpayers could face a frustrating and unpleasant
surprise when IRS systems catch the error and either reduce their refund amount or
increase the amount they owe.

To address this issue, the Direct File team updated the content to better explain estimated
taxes, specifically highlighting that estimated tax payments are not listed on Form W-2.

After these changes went live, the percent of taxpayers reporting estimated taxes
decreased to 4%, and of those reporting, fewer than 17% entered their withholding
amount.

There's still room for improvement, as illustrated by data and continuing questions to
Customer Support. Next steps would include prioritizing higher-effort, more difficult
engineering work to connect to other IRS systems and import a taxpayer's estimated taxes
into Direct File.

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Decreased rejections related to advance Premium Tax Credit (PTC) payments

Throughout the 2025 filing season, the top reason federal returns were rejected in Direct
File was for rejection reason F8962-070 (26% of all rejections through April 7). This
happens if a taxpayer was enrolled in a qualified Marketplace health plan, received
advance payments of the Premium Tax Credit (PTC), but didn't include information about
the plan and payments in their tax return.

• Around 75% of taxpayers who received this rejection answered that they did not
have Marketplace health insurance, even though IRS records showed they did.

• Roughly 25% of rejected taxpayers answered correctly that someone in their

family had Marketplace health insurance but then said that they didn't have
advance payments of the PTC, when IRS records showed they did.

• Customer Support chats and tax subject matter experts with Volunteer Income Tax
Assistance (VITA) experience supported the hypothesis that taxpayers often don't
know they had Marketplace insurance.

The team was able to update the content to better define Marketplace plans and advance
payments of PTC and add a link to taxpayers' IRS Online Account to check for a 1095-A
and download it. The team ran a rapid round of user research before launch, and testing
showed that these content updates increased taxpayer comprehension.

These changes ultimately didn't affect the F8962-070 rejection rate, so the team
prioritized higher-effort work to connect to other IRS system before the end of filing
season. As of early April, Direct File actively informed taxpayers that their IRS Online
Account had a Form 1095-A and provided a link to view it. This reduced the percentage of
taxpayers who received this rejection from 3.5% to 2.4%.

Decreased accidental disqualifications for the Child and Dependent Care Credit

As part of determining whether a taxpayer qualifies for the Child and Dependent Care
Credit (CDCC), Direct File asks, "In 2024, did you pay a household employee for dependent
care expenses?" If a taxpayer says Yes, Direct File says they'll need to use a different tool
to file their taxes this year.

During user research, several taxpayers answered the household employee question
incorrectly on their first try. The resulting "knockout" screen telling them they couldn't use
Direct File confused them. Looking at data on Direct File page views, the team also saw
that the household employee knockout screen was usually one of the top 10 reasons for a
disqualification each week.

To address this issue, Direct File updated the content to make it clearer what's considered
a household employee. After the content changes went live in mid-March, this knockout

81
dropped out of the top 10, and the percentage of taxpayers encountering this error
decreased by 50%.

Informed the product roadmap

For some of the more complex issues taxpayers encountered, potential solutions required
more cycles of design, research, and engineering iteration than could be delivered within
the short tax filing season. Instead, these informed Direct File's future roadmap:

1. Make it easier for taxpayers to enter their eligible tax documents; or if they have
documents that Direct File doesn't support, inform them they're ineligible sooner
to reduce frustration around the time invested in Direct File. An overhaul of the
information architecture can address taxpayer confusion around where to add both
eligible and ineligible form types.

2. Decrease rejections for rejection reason IND-032-04, where the prior year AGI or
Self-Select PIN for the spouse on a married filing jointly return doesn't match
IRS records. This was Direct File's second most common rejection reason during
filing season 2025. Direct File virtually eliminated this rejection for the primary
taxpayer, who creates the tax return with their IRS Online Account. Direct File
either imports their prior year AGI or doesn't require it because they've already
verified their identity. There are a range of potential solutions to reduce this
rejection for spouses, from lower-difficulty content changes to higher-difficulty
multi-user authentication functionality that allows a spouse who completes
identify verification to consent to having their data imported to a tax return created
by the primary taxpayer.

Insights to action process

To make sure this was an efficient process, the Direct File team operated under a few
shared concepts for understanding and intervention:

1. Created team processes for understanding live use of Direct File. This included
common disqualifications, rejection reasons, and customer service interactions.
The team paid close attention to all indicators to understand how the service
performed for taxpayers and where potential issues might be.

2. Approached issues as opportunities. When issues were identified, they became

opportunities to iterate on the product and evaluate the impact of any changes.

3. Started with tightly scoped interventions. This enabled quick deployments and
impact studies. If any issue was quickly solved, development effort could be
redirected to other issues. If it wasn't, there was time to try again.

82
Insights to actions team
This process required two partner teams: the Insights team, a cross-functional group
responsible for monitoring different data streams, deriving insights, and briefing the
larger team, and the Actions team, a Design and Product team responsible for rapid build-
measure-learn cycles and updating the product roadmap. These two teams worked
together: Insights' work fed Actions'work, and experiments run by the Actions team ran
gave the Insights team new items to monitor and evaluate.

The Insights team monitored and reported on key data streams weekly:

• Customer Support survey data

• Customer Support transcript data

• Customer Support Representative (CSR) daily feedback survey data

• Taxpayer post-submission survey data

• Backend data (tax return submissions, rejections, error codes)

• Usage analytics

• Usability testing

• Social media listening (comments posted to public platforms like Reddit, Bluesky,
etc.)

The Actions team reviewed insights weekly and examined findings through a design lens,
with a deep understanding of the tax logic and the return preparation experience. They
investigated questions like:

• Were the numbers for a certain rejection code changing or otherwise unexpected?
Why? What was the opportunity to address it in Direct File?

• Was there a high percentage of taxpayers asking CSRs a given question? Why?
What could Direct File answer more directly in the product to give taxpayers the
answer they need in the moment they need it?

From there, the process looked like this:

1. Identify an item for intervention, determine if an intervention could be done during

the tax season. If not, put that item in the backlog or product roadmap.

2. If the item could be done during tax season, create a "tracked experiment,"
including a hypothesis about how it would address the issue and how to measure
the impact of the intervention.

83
3. Work with Design, Product, and Engineering to create and deploy an intervention
and start measuring impact.

4. If the intervention didn't solve the issue for taxpayers, the team moved to the next
intervention and measurement cycle until the issue was solved.

5. If it wasn't solved by end of tax season, learnings were captured in the product
backlog and roadmap as needed.

Future opportunities
Maintaining and expanding the level of data insights support for the 2025 filing season
will be critical for future insights to action work. For example, more engineering support
would enable more frequent, more complex interventions. Experimentation could be
enhanced with more sophisticated tools for learning, such as split testing (A/B testing),
which would enable testing more than one comparable intervention at a time.

Additional enhancements could include:

• Help taxpayers understand and navigate significant changes to the experience.

Changing a live product means changing an experience "out from under" taxpayers
who have already started work. In filing seasons 2024 and 2025, the team limited
experiments to those that wouldn't disrupt a taxpayer who had started their taxes.
Significant changes only made sense if they could be cleanly isolated from other
aspects of tasks taxpayers already interacted with. But larger changes may be
possible, while maintaining taxpayer trust, for example, with a messaging system
that alerts taxpayers to changes, preserves any work they've already done, and
helps them navigate the new experience with confidence.

• Conduct larger experiments with more engineering support. During tax season,
time and resources were limited, especially in areas of complex tax logic. Designs
for better user experience went into the product backlog for a future year, instead
of capitalizing on live-use to test them. Examples of this include changes to
questions in the (1) about you and spouse sections that determine the taxpayer's
citizenship or residency status, and (2) family and household section that
determine if the rule for children of divorced or separated parents (or parents who
live apart) is applicable.

84
Appendix J: Tax Logic Design Principles

Interpreting tax law for taxpayers

Through research with taxpayers, the team learned taxes are scary and hard to get right.
This fear and uncertainty may be caused by:

• The complexity of the tax code: Taxpayers don't feel like they know enough to
be confident they have done everything they're supposed to do. They are not
sure how to maximize their tax return and stay compliant with the law.

• The high stakes involved: Taxpayers are concerned about being noncompliant
with tax law and losing out on refund money. People will leave benefits on the
table rather than risk getting their return wrong.

Because of this uncertainty, taxpayers may fail to take (IIHRS Direct File
advantage of tax benefits they are eligible for.
Checklist > flog status

To improve taxpayer accuracy and confidence, Direct File

Back
interpreted tax law for taxpayers. For example, taxpayers
may not have deep knowledge of the tax code, but they do
know information about their life situation and finances.
Direct File shared that information back to them in the You're using the Married
Filing Jointly filing status.
context of the tax code and learned about each taxpayer as
they answer questions. You qualify for this filing status because:

• You were married on the last day of the tax

For example, Direct File never asked, "What's your filing year

• You and your spouse were U.S. citizens or

status?" because the rules around filing status are complex. U.S. residents for tax tiulposesEI for the

Instead, Direct File asked a series of clear, plain language entire tax year

questions that narrow the field of options until the tool can You qualify for other filing statuses, but you chose
to use Married Filing Jointly for your federal tax
declare (or make an assertion) about the filing status they're return this year.

eligible to use. Assertions may also include which credit(s) If you update information about your marital
status or your family and household, it may
they're eligible for, and if someone qualifies as their change which filing statuses you qualify for. We'll
dependent. let you know if that happens.

How does my filing status affect moies?

For some assertions, there's nothing for the taxpayer to
decide. For others, the taxpayer could make a choice (or pick
an alternative), but the assertion screen clearly stated which Continue >

option was most advantageous for their tax situation.

Choose another filing status

85
"It's like they're reassuring you. Everything is reassurance. You may not know
this, but we'll help you along the way. It's like you're talking to someone, but
you're doing it by yourself."
"The simplification of the process prevented any potential misunderstandings
and streamlined the process."

Using progressive disclosure to increase transparency

Direct File used progressive disclosure and plain language to help taxpayers understand
tax rules within the context of their situation. Here's how this worked:

• Direct File presented just enough information to help taxpayers answer

questions confidently. The team used design patterns that provided just enough
information at every step to support most taxpayers. When answering a question,
users who needed more information could always dig deeper by clicking on helpful
links. For example, on a screen asking about a taxpayer's status as a dependent,
there's a link titled: "How do I know if I'm someone's dependent?" That link opened
up a pop-up providing additional information to help the taxpayer answer the
question confidently.

• Direct File explained basic tax concepts in plain language. Direct File defined
even the most common tax terms, like filing status or standard deductions, in plain
language. This provided context to help taxpayers make the best decision for their
unique situations.

• Direct File explained why a taxpayer did or didn't qualify for tax benefits. When a
taxpayer didn't qualify for a tax benefit, Direct File proactively told them why. This
reassured them they weren't leaving any benefits on the table and helped them
understand eligibility requirements.

• Direct File helped taxpayers understand the math throughout the filing process.
While hiding or showing too much information could've increased anxiety, Direct
File provided just enough information to help taxpayers understand how their
taxes were calculated based on the information they provided.

"Oh, that's nice. It did the math for me. I really like this. It makes me feel like I
can do my own taxes!"
"I appreciate that the math for my tax return was made very transparent. I have
very simple taxes so this may not be true for everyone, but for my needs, this
tool is perfect and also educational."

86
Let's see if you qualify for
Each section of Direct File began with a goal, so taxpayers
any tax credits this year. could understand how the questions would affect their taxes.
Tax credits can help lower the amount you pay in
taunter increase the size of your refund. For each
As taxpayers answered questions, Direct File explained the
math at key moments in the process.
dollar of tax credit you claim, there is a dollar
reduction in your taxes.

We'll check these credits:

• Premium Tax Credit

• glikLIDSLI2112endent Care Credit

• Credit for the Elderlys,anksatleA

• Saver's Credit

• Child Tax Credit and Additional Child Tax Credit

• Credit for Other Oeperidents

• Earned Income Tax Credit

You've already given us a lot of Information we can

use to see if you qualify, but we need masks few
more questions.

When we're done, we'll review the amount of each

Credit you can take. If there are credits that you don't
qualify for, we'll explain why.

For example, this screen explained the math that determined

Let's review your total income.
income. It included the taxable amount of all the income they
entered and that it wasn't necessarily the amount that would
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.110.011,10•011".1 ultimately be taxed. It set the stage for the next section, which
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subtracted their deductions to determine their taxable income.
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After taxpayers completed the deductions section, this screen

Now that we have your deductions,
we can tell you how much of
explained how adjustments were subtracted from total income
to calculate Adjusted Gross Income (AG I). And then, how the
your income will be taxed.

filbtolliy.•001alleflon.
standard deduction was subtracted from that to get taxable
income. This was a key teaching moment that demystified
.30.03 these important calculations.
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87
Taxpayers encountered more screens like this as they
Here's a summary of how we progressed through their tax return, eventually arriving at the
calculated your 2024 federal taxes.

aonn I • wila imam*

final tax amount explanation. This is a simplified snapshot of
how the taxpayer's taxes were calculated, and it's been cited
as an "Aha!" moment for taxpayers who didn't understand how
the different parts of the tax return connected.
hex,.

SY*, kw al•••110.4.,...
11,100.10

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pel,.......10.111..nati.Pre ism

Designing an efficient question flow

Throughout Direct File, efficiency was balanced with humanity. Sometimes, leading with a
few extra questions would make the following questions easier to answer.

These guidelines helped determine the order of questions:

1. Start with eligibility questions so taxpayers with out-of-scope tax situations are
informed as early as possible. This saves time and frustration.

2. Lead with questions that serve multiple purposes to help Direct File know if a
taxpayer is (or is not) eligible for certain benefits. For example, questions about a
taxpayer's relationship to a family or household member are important because
many tax benefits have a "relationship test," which is how the IRS determines
eligibility for certain benefits. If Direct File can determine a taxpayer's benefit
eligibility early on, future questions will be more relevant to that taxpayer.

3. Delay less universal questions. While most questions are grouped thematically,
family and household questions may be placed later in the flow if they aren't
relevant for many people. For example, there's a special rule for the Child and
Dependent Care Credit (CDCC) for people who were low-income, full-time
students, and/or physically or mentally unable to care for themselves. Even though
there are thematically similar questions earlier in the flow, these narrower

88
questions are placed later in the Credits section so Direct File can collect more
information about the taxpayer that might filter these questions out if they are
irrelevant.

4. Consider splitting complex questions into multiple questions that are easier to
answer, even if it's less efficient. For example, a question about repayments of
unemployment compensation is asked in two parts. There's a Yes/No gate, "Did you
make any repayments?" Then, if the answer is Yes, the next screen has more
details. Splitting this question into two reduces information overload for everyone.

5. Group similar questions to make them easier for taxpayers to answer, even if this
deviates from other general guidelines. Some questions fall into existing themes,
like citizenship, life circumstances, or income—and usually it makes sense to
group these together, but not always. Grouping similar questions reduces context
switching for taxpayers who would otherwise answer similar questions across
multiple sections.

6. Start with easier questions. For example, answering a question about how long
someone lived with you is easier than answering a question about the cost of
keeping up your home or paying someone else's living expenses. Asking these
simple questions early can help disqualify the taxpayer from certain benefits and
save them time trying to answer more complex questions that aren't relevant to
their situation.

7. Don't ask more difficult or sensitive questions until necessary, even if that means
separating similar questions into different parts of the flow. For example, when
adding a family or household member, Direct File asks for information about the
family member's TIN to help establish if they're a dependent or qualifying person
for tax benefits but doesn't ask for the actual TIN until later in the flow once we
know the family member qualifies.

8. Ask eligibility questions before calculation questions. For example, ask questions
to determine eligibility for the CDCC before asking questions that calculate the
amount of the credit. This way, Direct File can tell taxpayers if they qualify early on,
and explain why they're about to see extra questions about the credit.

"Not having to read the incredibly complicated instructions for filing was a great
breath of fresh air for me, especially after years of spending 10-15 hours/year
doing the math, the worksheets, and then trying to file and having the forms
rejected for reasons that were very impenetrable."

89
Appendix K: Data Import Design
Principles
The team used the core Direct File design principles as a starting point to create principles
specifically for Data Import.

• Reduce time and psychological burden

Direct File should pre-fill any information it already has about a taxpayer on their
federal tax return. This will reduce the burden of gathering tax documents and
manually entering tax information.

• Give taxpayers control of their data

Give taxpayers the choice to use their own data or manually enter tax form
information instead. If they decide to import data, they should be able to review
and make edits if necessary.

• Provide transparency
Inform taxpayers about what data the IRS has for them, the data source, and how
the imported data will be used on their federal tax return.

• Help taxpayers fix issues with their data

Inform taxpayers where their data is coming from, so they know where to go if
there's an issue. For example, if their name is outdated because they got married,
they should contact ID.me. If their Form W-2 shows incorrect information, they
should contact their employer. That employer will then submit a corrected Form W-
2 to the Social Security Administration, which sends it to the IRS.

• Build trust
Taxpayers already think the IRS has all their information based on previously
submitted tax returns. Deliver on their expectations and make it easier for
taxpayers to confidently and accurately file their taxes.

• Reduce errors and rejections

By importing data, Direct File reduces errors from manual data entry. In turn, this
decreases the chances of getting rejected post-submission.

• Progressive disclosure
Don't overwhelm taxpayers with too much data at once. Instead, reveal imported
data step-by-step. For example, for income tax forms:

90
o Display key details about the form, so the taxpayer can decide if they want
to import it.

o Once imported, ask about any missing information.

o Display all the form data for review.

Content considerations
• Distinguish between the IRS and Direct File
When explaining how data import works or where data comes
How does the IRS know this
from, clearly distinguish between the IRS and Direct File, so information?

taxpayers understand that data is coming from IRS systems Every year, your employer files a
Form W-2 for you with the federal
of record. This increases trust in the data. Direct File is a tax government. This information is
what IRS has on file for you.
preparation tool, not a data source.
If any of the information on your
W-2 isn't correct, contact your
• Always explain where imported data comes from employer. Ask them to correct
your W-2 and send you an
Always describe where data comes from to increase trust in updated copy.
Direct File, provide transparency, and give clarity if the data
looks incorrect.

• Use the right terminology to describe how Data Import works

Use descriptive, plain language, since taxpayers have different perceptions of how
Data Import works. Direct File often uses terms like "import" and "fill in" to describe
how to add tax forms or biographical information. In select cases, "pre-fill" is used,
although it's generally avoided so taxpayers don't think Direct File is filling out
their entire tax return. The team also avoided words like "pre-population" or
"upload," which could be confused with other functionality.

UX pattern: single screen

For some screens, the Data Import version replaced the existing screen where we asked
taxpayers to enter information. This was a one-to-one screen replacement in the tax flow.
Of note:

• Content updates were made to encourage the taxpayer to review the pre-filled
information instead of entering information or answering a question.

• When we pre-filled an input, we removed "(Required)" from the input label since
the taxpayer didn't have to do anything.

• We made these inputs fields un-editable because the information is specific to the
taxpayer and considered evergreen.

91
DATA IMPORT VERSION DEFAULT VERSION

Direct File Header Direct File Header

breadcrumb breadcrumb

(- Basis

Confirm your Social What's your Social

Security number. Security number?
We filled in your Social Security You can use either one of these:
number (SSN) or Individual Taxpayer
Identification Number (MN). • Social Security number (SSN)
• Individual Taxpayer Identification
Why can't I change my SSN or ITIN?
Number (ITIN) Issued by the IRS
9-digit SSN or !TIN
What if I don't have or know my SSN or
iTIN?
123.45-6789

Enter your 9-digit SSN or ITIN

Continue Save and continue

UX pattern: condense multiple screens into one screen

For some task flows, there was an opportunity to reduce the number of screens and allow
taxpayers to move through the tax return more quickly. In the case of IP PINs, we were
previously asking taxpayers:

1. Do you have an IP PIN?

2. If yes, are you ready to enter it?

3. If yes, what is it?

If Direct File detected that the taxpayer had an IP PIN, we could replace screens 1-3 with a
new screen that pre-filled the information for the taxpayer.

92
DATA IMPORT VERSION DEFAULT VERSION

about-you-ip-pin-choice about-you-ip-pin-ready about-you.ip-pin-input

Direct File Header

Direct File Header Direct File Header Direct File Header

breadCrumb

breadcrumb breadcrumb bmadaumb

We added your * Bata

Identity Protection (IP)
Has the IRS provided you Are you ready to enter your Enter your 6-digit identity
PIN to your federal tax with an Identity Protection Identity Protection (IP) PIN? Protection (IP) PIN.
return. (IP) PIN?
ao PIN IReouaea)

1 023456
You Indy neve mounted en IP Pat 01
the IRS eaugne0 000 10 you TIvs
wooaas onto ivotacton /lomat 101. Only some maancluaa nave IP
(0100.0 identity then Tboyat assign. by 0* MS
eacb yvae as extra security opals,
ymuisy , IP uavrelatea Oenbly theft.
0 Yes. I have Ole P PIN
Wb,laollsbang=t1P_EINI
(009urf od) 0 No. I, not able io fetneve • r
IP PEN
0 Yes
I 03456
0 No Yes

Save and 10000 0,0 Save and contnue Save a. continue

Conbnue

UX pattern: skip screen, don't show anything

If Direct File looked for a taxpayer's IP PIN and didn't find one, then there's no need to ask
or display anything further, and Direct File can skip over the IP PIN screens.

About you - IP PIN flows

Current (all primary taxpayers

Mr aboulyou. aboutyou. abOut-you-

about yOU n— 00 p-pan
about you bout you
questIOnS questions
cnoice ready input

.1-.

aboutiou.
icapin-nOt- Cont
toady

If data import is available Mu Import

and IF PIN = true
Mao Hide U011100 OM.*

about you
about Poe about you about-you
;vp data
questions questions dotaAnow
.010001

Md.

II data import is available 141d•IPPIN =fon*

and IF PIN false

about you about-you

queStOnS data•vIew

93
UX pattern: mini data view
In Direct File, data views show a summary of answers to a section. They allow taxpayers to
review or edit their completed answers before moving on. For Data Import, the team
created a mini data view that shows a summary of imported information about the primary
filer, like name and contact information. When collected manually, this information is
spread across multiple screens. But the team determined that imported information would
be easier to review on fewer screens.

DATA IMPORT PARA DATA NEW

/data.preview/about.you-data-import about.you.basic-info-imported eboutiou-contact.info-imported about.you.breat her

Direct File ticieder

[academe!" broadourrib

We filled in some of Edit your basic Edit your contact Thanks for confirming
your information to in!orntatiOn. information. your information.
save you time. Is this
ono-nnann OINK. VO, Let's get some
correct?
••i ntli Inr unnle..ont additional information
n are precole.
C.. mat rferwlen es nen. n about you.
nn,/ ...O.
.1110610n,ou<0.0nun
M.,1mg add's,
1.1.“.,InentS.1, 11k

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Your confect Infommtion

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Zero. i

b oo
ICISTIVISS

teal rear,.

I0 .0..ieritr nen

V ri

UX pattern: importing income tax form data

For importing income tax forms, the team redesigned the existing sections to better
support the new experience. This was a high level of effort for design and engineering,
because it required seamless integration with the existing manual flows. They also needed

94
a backup plan if the import service was down or the taxpayer exited in the middle of the
import.

The new Data Import versions of the Jobs and Interest income sections:

1. Inform taxpayers what data (if any) is available to import (Forms W-2 or 1099-INT).

2. Give taxpayers the choice to import all, some, or none of the data.

3. Ask taxpayers to fill in missing information.

4. Prompt taxpayers to review each form they imported via a data view.

5. Give taxpayers the opportunity to manually add any forms that weren't available to
import, including any from their spouse if they're filing jointly.

W-2 DATA IMPORT SCREEN 109SINT DATA IMPORT SCREEN

/data-preview/jobs-data-import /data-preview/int-data-import

4 OW.101 44 toctscoms.40 do hore

WI 4114a 10 0.01 twirr109t-INT cart• Imp.

D.CCI Fly Mender

breadCruMb

Jobs

Select the Forrn<s> W.2 that

you want to import <for
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95
UX pattern: imported tax forms with knockouts
As a taxpayer provides information in Direct File, they are sometimes told their situation
isn't supported. This is called a knockout. While manual entry typically results in a single
knockout reason, importing a whole form could result in multiple knockout reasons at
once.

To address this new situation, the team created a composite knockout screen that would
show after import. It can display either one or multiple reasons explaining why Direct File
doesn't support their tax situation. The team found this more flexible knockout screen
easier to manage, and they plan to repurpose it for all knockout screens across the tool in
the future.
W.2 DATA IMPORT KNOCKOUT

M=.
/data.preytew/pbs-data.import telata.prewew/jobo-datAtmpart.ko wx-colkt-tton.hub /data.snew/w2

ill'aM11.•••••••10 • 101••• npOrtail • mow ono elpirl.

4,4200.1.1. PaPo.01).0.11•41.1a • W-/

lobs .1 Brl 1 OA,

Select Ow Paross• W 2 oun

Prod F. doesn't support Jobs
you want to unport tor Review: Employer's
l'IsteirotNanw, your tax snuation
AIM• Legaalt2 ••••08.10,10, 'IAMB>
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96
UX pattern: checking if the taxpayer has a form
Towards the end of the 2025 filing season, the team tested out a new type of data import
with Form 1095-A. Instead of bringing in the form data, Direct File only checks if a
taxpayer has the form. This scenario was useful for a few reasons:

• It was significantly less design and engineering effort to import the existence of a
form versus all the form data, a great start-small strategy on a tight timeline.

• In the future, it would be helpful to check for unsupported income tax forms, so
Direct File can tell taxpayers right away if their income isn't supported.

DATA IMPORT SCREEN & ALERT DATA IMPORT SCREEN

1095-import-info 1095-import-info-no-form
show to: everyone with zero Form 1095-As in
show to: everyone with a Form 1095-A in
their online account, except MFJ dependent
their online account, except MFJ dependent
taxpayers
taxpayers

Direct File Header

Direct File Header

breadcrumb
breacicrumb

Bari
IRS records show that you
IRS records show that you
don't have a Form 1095-A
have a Form 1095-A for
for <TY>.
<TY>.
This means that in <TY>, you
This means that <you/you or your
probably didn't have a Marketplace
dependents/you or MRISpouse1st/
health plan that qualifies for the
you, MFJSpouse1st, or your
Premium Tax Credit (PTC).
dependents> probably had a
Jvlarketolace health olan In <TY> that
qualifies for the Premium Tax Credit You should still check if there are
any Forms 1095-A for
(FTC). We'll ask you to confirm this
next. «ME1Spouse1st>/<MRISpouse1st>
or your dependents/your
dependents> because Direct File
1 11 Get Form 1095-A from <your/ can't check their online accounts yet.
TPIFirstNnme's> IRS Online
Account Efi Next, we'll ask you to confirm If <you/
you or your dependents/you or
What if I didn't have a Qualified MFJSpouse1st/you, MF.ISpouse1st,
Marketolace health plan but received or your dependents> had a qualified
a Form 1095-A7 Marketplace health plan.

Continue Continue

97
UX pattern: informational alerts
0. 0 4.0 0 .0 10 •10...plan multiple fosms-0.0.

In addition to displaying the conditional Pop •

assertion screens, Direct File also

displays informational alerts on relevant &MB

cleersies <rn.sem
screens to help taxpayers accurately erkesse a see
• NS

SIPloomel.er PAPP moso1 Jr...••••••••• NAOMI

answer questions related to Form 1095-

140.101.A.X 4.1,111.6. fors0 010.4.01ovoss
ciam Pond I. Pp ,
1,110011011,012011111.10.
Mo10.1.. P
Mop. 6.04160C1

A. The alerts informed taxpayers that

- Yet -• non. -O r WA**. sow

Mo. nons,

Direct File detected Form 1095-A in • Pim.. seisms..

'77fj :7-4 ii
their Individual Online Account. •
asa••••••••••
Molls•••••••••••
..••••••••• ••

UX pattern: fallbacks
Direct File uses a fallback strategy in case the Data Import service is unavailable. The
team opted to default to the existing flows and screens where we ask taxpayers to input
all their information.

About you flow

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About you flow backup - data Import bait available

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11.1001.0.1.6
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sre *PP P
MOMS

98