IRS Makes Direct File Code Public as Lawmakers Debate Program’s Fate

The IRS made its Direct File program code open source this month to enhance transparency and trust as lawmakers look to eliminate the free online tax filing platform.

IRS used Inflation Reduction Act funding to create Direct File in 2023 and made the program permanent in 2024. The tool provides an electronic tax filing platform to enable eligible taxpayers to file directly with the agency. A limited pilot launched in 12 states during the last tax season, targeting simpler returns under a specific income threshold.

While survey feedback showed users found it easy, time-saving and cost-effective, Republican lawmakers have introduced multiple bills calling for its termination. They have deemed the tool “unnecessary and unconstitutional” due to existing Free File options and have raised concerns about its cost and potential expansion. A current measure in the proposed 2025 budget reconciliation package, which has passed the House so far, would officially terminate the program.

The proposed bill directs the Department of the Treasury to end the Direct File Program and evaluate a “partnership between the IRS and private sector tax preparation services to offer free tax filing, potentially replacing both the existing Direct File and Free File programs.”

While Direct File’s fate remains undetermined, IRS leaders have made the tool’s code open source, enabling other agencies to learn from the agency’s approach, reuse components or adapt the code for their own digital services.

IRS Makes Code Open Source

Chris Given, the former product lead for Direct File, told GovCIO Media & Research that making the code open source was the final step in demonstrating the team’s “commitment to trust,” a principle instilled from its onset.

“The code that we’re developing should be available to the folks who paid for it. And that’s not just useful in the tax base. I think there’s a lot of applications, certainly to state revenue agencies, to international revenue agencies, who might be able to reuse some of the things that we built for Direct File,” Given said.

He suggested that new applications could be developed using the code to stretch its value beyond the IRS, allowing its legacy to live on through others who might build their own tax filing applications and test them using government code.

“By putting it out there, we’re making that information available to anyone who wants to build a filing option, something that folks who are doing commercial filing options can learn from tests that they can benefit from,” Given said. “We’re trying to really contribute back to the tax ecosystem in a constructive and collaborative way.”

Direct File’s Origin and Legacy

The IRS Direct File’s team originated as a joint venture of the U.S. Digital Service, IRS and 18F employees in 2023 with a mission of streamlining the tax filing system for all taxpayers. The tax filing system was notoriously complex, and the Direct File team was tasked with providing a free, government option that could help users understand what they owed and what benefits and credits they were eligible for.

Katie Aloisi, former principal designer at the IRS, said at the 2025 Code for America Summit in Washington, D.C. this month, that the application was designed to be “wonderfully unremarkable” and be simple and transparent about what benefits users were eligible for.

“Being transparent for us is not about exposing every detail. It’s being selective about what information you present and then presenting that in terms that resonate with your audience,” Aloisi said. “It helps build confidence that they know how their taxes were calculated, and it also builds trust that they’re getting all of the benefits they qualify for.”

In the program’s early days, Given emphasized principles like agile development and open-sourcing the data, but also set lofty goals of releasing a new version of Direct File every day.

“This was very much an exercise in using Direct File to tackle some of the bureaucratic hurdles, the blockers that I think a lot of IRS IT folks recognized were there and had really struggled to overcome.” Given said. “Direct File provided a kind of battering ram to tackle that difficult bureaucratic challenge.”

The program asked taxpayers a series of questions, narrowing down qualifications before informing them for what benefits they were eligible. At its pilot phase in 2024 in 12 states, the program logged 423,450 taxpayers, with 140,803 submitting accepted returns, according to the IRS.

Suzanne Chapman, former civic designer at the IRS, said at the Code For America Summit, that the team solicited feedback from taxpayers during development to understand their pain points and streamline the filing process.

“I think taxpayers are maybe one of the most diverse populations you can try to design for because it is literally with almost everybody. We wanted to make sure we talked to people with different lived experiences than us,” Chapman said.

Given said that by the end of the pilot program, Direct File was deploying a new update once a week and by the end of the second year, twice a week. Continuous integration and deployment were key components of that strategy, alongside reviews from the IRS Office of Chief Counsel.

Given said that even though Direct File was not a perfect program, the application was designed to suggest alternatives for taxpayers that could not find a solution through Direct File. Given said that even if Direct File is in its final throes, its creation can spur others to take up its mantle and work toward simplifying the tax filing process.

“We took a pipe dream and made a policy choice. It’s no longer possible to say that Direct File can’t be done now,” Given said. “You just have to choose whether or not you want to do it.”