Ellen McGirt | Essays

Something to celebrate on Tax Day

A new tool gives Americans a free and easy way to file federal taxes. It’s equitable by design.

The IRS has successfully launched IRS Direct File, a pilot program that’s finally given Americans a free and easy way to file their federal taxes directly with the government.

The pilot is available in just 12 states so far, and only to people with relatively simple tax situations: those who take the standard deduction with W2 earnings from salaried employment, benefits from Social Security or unemployment insurance, and interest income of $1,500 or less. That said, this pool accounts for about 90 percent of Americans for whom a reliable and free option is welcome news.

So far, it’s getting high marks from taxpayers.

“If it sticks around for the rest of my working life, I am doing business directly with the IRS,” Marina Garcia, who lives in Georgetown, Texas, told NPR. She said it’s as easy to use as H&R Block’s software but without the annoying upsell prompts pestering her to pay more. “I don’t have to go to a third party. I don’t have to pay. It’s straightforward. It’s easy-peasy.”

The pilot came together quickly.

The funds to develop the program were buried in the details of the 2022 Inflation Reduction Act, and by May 2023, the IRS had delivered a preliminary proposal for a workable tool. That’s an astonishing turnaround, especially for the federal government.

Taxpayers have long complained about the filing process — bemoaning expensive services and misleading marketing practices from tax prep giants like H&R Block and TurboTax — or the need to pay for local tax preparers who may or may not be on the up and up. IRS Direct File, currently offered in English and Spanish, simplifies things while removing the up-selling private sector intermediaries.

Coforma, a minority and veteran-owned design and digital services firm, was the lead contractor on the design side of the project. Their work focuses on seemingly intractable structural problems; by way of example, the company provided user experience design, content strategy, translation, and other services for together.gov, a site used to register families separated at the U.S. government at the U.S.-Mexico border from 2017-2021. More on that here.

In addition to making life easier for all eligible taxpayers, the new tool offers the added benefit of making things better for some of the most vulnerable.

“Improving the U.S. tax system is not just a matter of modernizing government systems — it’s a matter of justice,” says Andrea Cristina Mercado, the executive director of Florida Rising, a nonpartisan political organization focused on BIPOC and marginalized voters. Latino voters, particularly recent immigrants, may turn to unqualified preparers to help them navigate the tax system. “In the United States, these individuals often operate as financial predators, exploiting vulnerabilities within our communities, charging exorbitant fees, and putting vulnerable taxpayers in jeopardy with the IRS.”

A version of this essay was originally published in the Equity Observer email newsletter. Catch up on past issues here. Sign up for insightful commentary, breaking news, and community shout-outs delivered twice weekly. Find your people.

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