Inflation Reduction Act: Results of the Direct File Pilot

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Date Issued

Thursday, March 20, 2025

Submitting OIG

Treasury Inspector General for Tax Administration

Agencies Reviewed/Investigated

Internal Revenue Service

Report Number

2025-408-015

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

Funds for Better Use

Report updated under NDAA 5274

Open Recommendations

This report has 8 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
1	No	$0	$0
The Chief, Direct File, should ensure that the total costs of Direct File include the costs from all support functions.
2	No	$0	$0
On March 13, 2024, we alerted the Chief, Direct File, to the large number of Direct File returns being rejected for this reason. We suggested that the IRS update Direct File so that taxpayers obtain their prior year AGI from their Individual Online Account, because the IRS uses the same authentication requirements for both Direct File and the Individual Online Account.
3	No	$0	$0
The Chief, Direct File, should determine what caused taxpayers to not receive their prior year AGI from their Individual Online Account and update the computer programming accordingly.
4	No	$0	$0
The Chief, Taxpayer Services, should ensure that errors are corrected on the tax returns for the six taxpayers whose returns were not corrected and had inaccurate Earned Income Tax Credit computations and refund their overpayment.
5	No	$0	$0
The Chief, Direct File, should notify the 669 taxpayers we identified of their potential eligibility to claim the education credits. The notice should inform them of their potential eligibility and steps for claiming the credits.
6	No	$0	$0
The Chief, Direct File, should implement a solution that will allow a taxpayer’s authentication from the CSP to be used for Direct File chats. This solution should follow all relevant security standards.
7	No	$0	$0
The Chief, Direct File, should improve the scheduling and monitoring of Direct File employees to ensure the efficient use of these resources.
8	No	$0	$0
The Chief, Direct File, should improve the Direct File chat technology to systemically queue up chats for assistors, based upon the assistor’s experience.