IRS Releases Open Source Code for Direct File Software Following Trump's Attempt at Abolition
In a surprising turn of events, the Trump administration's decision to discontinue the Internal Revenue Service's (IRS) Direct File program has sparked controversy and opened up opportunities for innovation.
Launched in 2023 with funding from the Inflation Reduction Act, Direct File allowed eligible taxpayers to file their taxes directly with the IRS through an electronic platform. A pilot program conducted in 12 states targeting simpler returns under an income threshold received positive feedback, with many finding the tool easy, cost-effective, and trust-enhancing. An after-action report showed the program genuinely transformed aspects of tax administration.
However, during the Trump administration, Republican lawmakers and IRS officials moved to terminate Direct File. The program was deemed unnecessary due to existing Free File options and concerns were raised about its cost and potential expansion. Legislation influenced by the Trump administration's policy stance officially ended the program. The 2025 budget reconciliation package passed by the House includes a measure to terminate Direct File and evaluate partnerships with private tax preparation services instead.
In response to the termination, IRS leaders released the Direct File program's source code as open source, to maintain transparency and allow other government agencies to reuse or adapt the software for their own digital services. This move could potentially attract developers to create new, independent tax-filing tools.
The open-sourcing of Direct File's code comes amidst efforts to eliminate it by the Trump administration, Elon Musk, and tax lobbyists. Notably, Musk's actions have targeted Direct File, including the dismantling of the government agency that built it, 18F.
The publication of Direct File's code on GitHub makes it open source and accessible for others to use. Several people heavily involved in building Direct File for the IRS have joined the Economic Security Project's Future of Tax Filing Fellowship. The people involved in this fellowship might use the open-sourced Direct File codebase to create simpler, more accessible tax-filing tools.
However, it's important to note that the code for Direct File, while not independently runnable, still relies on internal IRS systems. The Trump administration's motivation for following the SHARE IT Act, which requires agencies to share custom source code, is not guaranteed, as they are not always motivated by adhering to the law.
The move to open-source Direct File's code has been criticized by tax lobbyists. Intuit, the company behind TurboTax, has lobbied to kill a government-provided free tax filing option. Despite the controversy, other tax administrators, both in states and internationally, could build upon and contribute to the IRS's work on Direct File, improving the software over time and providing additional public value.
In summary, the Trump administration's influence led to the termination of the IRS Direct File program despite its innovative approach and successful pilot, shifting the future of IRS tax filing software away from open-source direct filing toward private-sector partnerships. The open-sourcing of Direct File's code offers opportunities for innovation and improvement, with potential for the creation of new, accessible tax-filing tools.
| Aspect | Outcome | |----------------------------|-----------------------------------------------| | Program Launch & Support | Created and made permanent before Trump era | | User Experience | Positive feedback; reduced stress and costs | | Trump Administration Actions| Introduced bills to terminate program | | Legislative Outcome | Program ended in 2025 budget reconciliation | | IRS Response | Source code made open source for transparency | | Future of Program | Discontinued; potential shift to private sector partnerships | | Open-source Code Opportunity | Offers potential for new, accessible tax-filing tools |
Gizmodo reported that the open-sourcing of Direct File's code by the IRS has paved the way for the future of technology in tax filing, potentially leading to the creation of simpler, more accessible tax-filing tools by developers. In this tech-driven future, the innovation and improvements brought by the open-sourced Direct File codebase could disrupt the traditional tax filing landscape, with private tax preparation services facing competition from these new tools powered by technology.
