8 ms·

The Life and Death of Direct File [pdf]

223 points by ronbenton 2mo ago

LastTrain 2mo ago
There isn’t much to study - it didn’t succeed or fail on the merits - someone didn’t like it because he didn’t create it so it got axed.
- ronbenton 2mo ago
  I disagree wholeheartedly that there isn’t much to study. Direct File was actually a resounding success, especially when you consider how much difficulty governments tend to have shipping good software products. There is a lot of good information in here that government entities can learn from.
  - mixdup 2mo ago
    Including how and why it died. That is an important lesson for the entire governmental enterprise, including all decision-makers, to learn: that government CAN deliver something good and one single person should not be in totalitarian control
    - IncreasePosts 2mo ago
      I think it speaks to doing things "the right way". Direct file could have been mandated by Congress, but it wasn't. Instead it only directed the IRS to do a "study" as a "voluntary agency initiative". That left full control of whether it should be done in the hands of the IRS and the executive branch.
      - throw0101d 2mo ago
        > Direct file could have been mandated by Congress, but it wasn't. Something being mandated by Congress is no protection at times: * https://en.wikipedia.org/wiki/United_States_Agency_for_International_Development https://en.wikipedia.org/wiki/United_States_Agency_for_Inter... (Or the Constitution for that matter it seems.)
        mikeyouse 2mo ago
        More concretely and timely for this discussion - the beneficial ownership registry was passed in the 2021 NDAA by congress and signed by Biden. So there's a law on the books that FinCEN needs to collect the ownership data for all US companies to prevent money laundering. This week, Bessent decided that the signature policy of the Corporate Transparency Act, a bipartisan effort to stymie cartels and foreign oligarchs, would not only be stopped, but they instructed FinCEN to delete all the records they've already collected. Easily the most lawless gang of corrupt bureaucrats that have ever held office in the US. https://thehill.com/business/6025347-treasury-repeals-beneficial-ownership-reporting/ https://thehill.com/business/6025347-treasury-repeals-benefi...
        Terr_ 2mo ago
        Not a funding issue per se, but Congress also passed a law requiring that the "Epstein files" be released by December 2025. Yet here we are, ~9 months later, and the Republican administration is still violating the law's deadline and its requirements not to black out the names of people who aren't trafficking-victims. Meanwhile, Republican legislators are looking at the people responsible and *checks notes* ... rewarding them with powerful government jobs. [0] [0] https://www.citizen.org/article/todd-blanche-the-epstein-files-a-timeline/ https://www.citizen.org/article/todd-blanche-the-epstein-fil...
      - LastTrain 2mo ago
        Yeah that would have protected it /s
    - locknitpicker 2mo ago
      > That is an important lesson for the entire governmental enterprise, including all decision-makers, to learn: that government CAN deliver something good and one single person should not be in totalitarian control This is only a major epiphany to proponents of a US-based ideological current, and mostly the result of anti-communist cold war propaganda. The rest of the world is well aware that state projects can and do succeed more than they fail.
  - firesteelrain 2mo ago
    It had talented software engineers involved including with the marketplace. It succumbed to political forces
- pudgywalsh 2mo ago
  [flagged]
  - pas 2mo ago
    let's say a non-profit hosts it somewhere can people use it to file their taxes for free?
- pseudosaid 2mo ago
  It didnt happen because Intuit lobbied against it like their business model was in existential crisis. The canary is that inappropriate power imbalances will ruin even the most hard one feats of human collaboration and effort. Its like learning about why jaywalking became a crime, or why recycling is a consumer’s respobsibility. Edit: So I'm about as original as a model can be as I went to go fact check myself and I basically cliff noted an AI summary for yall pre-gen.
- margalabargala 2mo ago
  I doubt this is the reason. In this particular case, it's more likely that a company such as Turbotax paid a sufficient sum of money to the President or one of his family members in exchange for this consideration.
- solarkraft 2mo ago
  Then there is that to study
- MisterMower 2mo ago
  Congress authorized a study, not a full blown system, or even a working prototype. No taxpayers should have ever been allowed to use it to file a tax return. Despite Congress appropriating only $15M to do the study, the program managed to blow through at least $41M, likely more.[1] This included advertising costs in some states to encourage taxpayers to use the system. This would be like your boss asking you to send him an email about the pros and cons of adding a feature, and you going and implementing the feature, pushing it to production, and then asking customers for feedback on it. Whether or not the feature was a success is 100% irrelevant. That’s not how things should be done. We are a nation of laws, and even if the program was a smashing success, there needs to be accountability. 1. https://home.treasury.gov/system/files/131/Report-Replacement-of-Direct-File-2025.pdf https://home.treasury.gov/system/files/131/Report-Replacemen...
  - cyberax 2mo ago
    > We are a nation of laws Have you considered doing stand-up comedy?
  - LastTrain 2mo ago
    > We are a nation of laws Yeah sorry but to be out here defending the actions of this administration while trotting out that phrase, you either have no self awareness or are a craven liar. Nation of laws SMH…
  - Kinrany 2mo ago
    > No taxpayers should have ever been allowed to use it to file a tax return. I see why blowing too much money on the study is a problem. Though this needs to be compared against the norms around this kind of thing. If we wanted these limits to be strict, we would make it actually impossible to spend more. But I do not understand why creating a system and letting people use it would be a problem. "We believe the best way to get this information would be to build a prototype and see how popular it will be" makes perfect sense to me.
    - MisterMower 2mo ago
      > this needs to be compared against the norms around this kind of thing Because other government programs waste money, it must be okay that this one did too? Congress put $15M in the Inflation Reduction Act for the purpose of a study. If they wanted to spend $41M or $400M, don't you think they would have written that number into the law instead? > But I do not understand why creating a system and letting people use it would be a problem I don't know how to say this in any other way: it's because it was not authorized by law. That reason alone is sufficient. This attitude of "well it was for a good cause, I suppose we can just ignore the law in this instance" is the root of many of our problems in this country. At its root it's really just "the ends justify the means" thinking. Today it may be something you support. But tomorrow it's deportations or illegal recess appointments or unlawful searches and seizures. When you allow certain laws to be enforced and others to be ignored you set the stage for tyranny. In many ways we are reaping the harvest of this lax attitude toward how laws are executed in this country. I hope this program serves as an object lesson in why complying with the law may seem tedious but is actually the bedrock of our constitutional order.
Defenestresque 2mo ago
A fascinating , yet sad, post-mortem. Anyone wheeling and dealing along in the shadows between "politics" and "deliverable, functioning product" should read it. Or, I guess, paste the link into Claude or ChatGPT and ask it to summarize for them, lessons learned in bullet points and how it could apply to $their_job. But I'm generally a weirdo who finds these kinds of reports fascinating, so don't purely go on my recommendation.
gradus_ad 2mo ago
Eh, government should not be in the business of maintaining digital infrastructure, regardless of how capable it might be. As much of it as possible should be contracted out to 3rd parties.
- compiler-guy 2mo ago
  Explain your reasoning at least. The government has to maintain some infrastructure to get this sort of thing done. Whether digital or analog. And if it contracts it out, it needs to oversee it. So no matter how it is done, the government has to pay.
- denkmoon 2mo ago
  You could just light the money on fire instead and get the same result. Contractors routinely screw the tax payer. I once had a job in one of these third parties where the entire operation was effectively defrauding the tax payer by claiming 1hr jobs would take 40.
  - cuuupid 2mo ago
    You are absolutely correct, billable hours are perverse incentives and wrap rates border on predatory, but this status quo is Congressionally mandated and buy commercial as a policy is generally bipartisan.
  - socalgal2 2mo ago
    You seem to be under the impression that the government itself doesn't have the same problem. Government agencies often over bill, over budget. They have an incentive to pad everything and to never lower costs because their budget will be lowered otherwise. Contractors on the other hand, have to compete with other contractors so while they can try to over bill, if they bill too much the government has an incentive to switch contractors. Neither system is perfect.
    - wredcoll 2mo ago
      > Neither system is perfect. Yes, thats why people arguing that private companies are always better are so annoying. You get that you're actually agreeing with this post right?
anigbrowl 2mo ago
I was surprised how much I enjoyed reading this. Although it's necessarily opinionate d(the lead author was part of the Direct file team) it comes off as very even-handed, giving equal consideration to successes and failures, and addressing the partisan political environment in factual terms. It's unusually well-written, providing lots of key details or dropping in relevant context without ever losing sight of the big picture and the looming deadlines. I expected to just read the executive summary and then skim the rest, but it held my attention the whole way through.
johnsmith1840 2mo ago
Very basic analysis by da bot says it costs the government roughly 226$ per filing vs a private company 40$. Would love to hear the opposite argument but the point I first saw online is saying the same, that it cost more tax payer money to run than it saved those tax payers. Scale problem? Open to hearing the opposite argument.
- ronbenton 2mo ago
  It was a pilot and was open to a small subset of taxpayers. It was intentionally not benefiting from economy of scale to incrementally deliver value rather than probably badly trying to hit every use case the first go around. The cost per filing criticism is generally posited in bad faith, by people who don’t understand incremental software delivery, or both
  - johnsmith1840 2mo ago
    Ok but why even make it? 40$ per taxpayer filing vs the government doing it with our taxes. I doubt it's going to beat private industry's price. It's not a bad faith argument though. If it cost the gov 40$ or it cost a tax payer 40$ what's the difference?
    - mixmastamyk 2mo ago
      Why should a malicious third party have our financial records? Why would a third party know filing reqs better than the IRS? They already know the data anyway. Other countries have done this for decades already, cheaply.
    - vincnetas 2mo ago
      Is this fixed cost per filling, or does it include cost of developing the system? I somehow doubt that for all Americans to fill taxes it would cost 6.5b$ (163x40) I think its like building a bridge analogy, when it costs you to use ferry only 0.01% of price of the bridge. But when its built its essentially free and ferry goes out of business.
deleted 2mo ago
[deleted]
rexpop 2mo ago
[dead]
cuuupid 2mo ago
I was not a fan of Direct File (I think it could have been much better!) but it was objectively in the success bucket: - ~$50M all-in to build which sounds egregious but is small for a government project - mostly good outcomes - ~4y to pilot which also sounds egregious for a single moderate-complexity web app but again is practically lightspeed for a government project People blame it getting shuttered on Trump but this is both a misread and a fundamental misunderstanding of how the government operates. The entire federal government is deliberately paced and primarily driven by a combination of politicals, regulation, budget, Congressional policymaking, and program staffing. The hammer on this was always going to fall, [1] Congress has maintained a "buy over build" policy since literally the Cold War. Ironically the first policy here (1965) was to buy computers from ADP instead of custom-building them. The most impactful "buy commercial" policy (1996) was also IT focused. This was literally codified in several parts of the FAR, and if we're going to be blaming admins, the Trump admin has actually weakened the FAR with the RFO and would be on the other side of this issue. [2] This policy is also the foundation upon which IT contractors like Palantir are built, if you've ever wondered "wtf do they do" they are a commercial contractor that builds custom software for government. So agencies get their custom stuff, Congress is happy they bought commercial, and the only loser is the taxpayer who overpaid a factor of 3-5x. To their credit, Palantir is a huge improvement on the status quo, because they charge by use cases and outcomes, whereas traditional SI's operate on a staffing model and a combination of high wrap rates and perverse incentives with billable hours creates horrible outcomes and ballooning costs. Anyways, there are a lot of commercial vendors that this work "could have" gone to and didn't. It would also have been really easy for them to shop this out because this was shaped really well for GSA MAS or STARS III. [3] When you build things internally with e.g. 18F, one agency is typically the "customer" and pays the other agency (afaik 18F program is nested under the White House). So this really sucks when they walk away; 18F earned a reputation for building things through pilot, blogging about it, puffing their cheeks in the media, sending a bill to the agency, and then running off to the next shiny thing as engineers tend to do. As an agency you save a bit of money initially but now you are left with something nobody knows how to maintain, you have to hire contractors to do it, which by nature has to be a staffing contract, and then the wrap rate alone wrecks you. This happens all the time with commercial vendors, usually when they are outsized or don't get renewed, but obviously upsetting when it happens internally. [4] The author of this piece was part of the team and so as you'd expect this piece is exceptionally biased. The reality is that the IRS self-assessed the maintenance as low and everybody who reports on this treats this as fact when it was not a GAO estimate, which is what carries any actual weight, it was internal IRS estimates and a single independent that mainly assessed call center volume not the actual system. Not only does their reputation precede them here, but their own spend on buildout (~$30M on contractors to help) contradicts the low maintenance narrative. We may never see a GAO estimate here, but the contract would almost certainly go out to TrussWorks, all government contracting data is public and you can look up for yourself how much TrussWorks typically charges the IRS whether directly or thru ATI's vehicles as subawards.
chocolol 2mo ago
[dead]
tonetheman 2mo ago
[dead]
johnsmith1840 2mo ago
[flagged]
- margalabargala 2mo ago
  > All I said was that the cost was higher for tax payers than private industry. Right, yes, generally government services have higher taxpayer costs than private industry that isn't funded by taxpayers... The question, which has not been answered, is: were equal numbers of people to use private vs IRS services, which would at that scale cost more per filing?
  - johnsmith1840 2mo ago
    Yeah that was my point and question. It was more expensive but I was wondering if it was just a scale problem. Kinda weird someone can delete comments like that on here.
    - forestrywat 2mo ago
      Your comment wasn't deleted. Are you sure you don't have it minimized? (The minus sign next to it.)
      - johnsmith1840 2mo ago
        Nah it only returned after my comment here
        forestrywat 2mo ago
        You sure it wasn't database coherency or some other issue on the tech side? Comments are basically never ever deleted here. Even the most vile racist or ableist or homophobic comments just get flagged to death and left up.
        johnsmith1840 2mo ago
MisterMower 2mo ago
The biggest issue with Direct File is the conflict of interest created by having the government who benefits from your tax payment also prepare the return for you. Given the massive amount of IRS shenanigans over the years, it is easy to imagine certain groups unfavored by the government conveniently being led to file returns that cause them to miss out on subsidies they are actually eligible for, or to pay higher taxes based on filing their return in correct but unfavorable ways resulting in higher tax payments than necessary. This risk is particularly high given that the program was intended for and marketed to low income filers who typically rely on their tax preparer as an advocate to ensure their tax payment is as low as legally possible. As other comments have mentioned, the program also exceeded statutory authority. Congress authorized the IRS to study a direct file system, not implement one on a permanent basis. It is a good thing when our government is restrained after it oversteps legal boundaries. This is especially true in the case of this program because it was being intentionally implemented on a massive scale in order to make it politically unpopular to shut down. A program that allows 10% of all tax payers in 25 states is obviously much more than a study.
- hvb2 2mo ago
  > The biggest issue with Direct File is the conflict of interest created by having the government who benefits from your tax payment also prepare the return for you. The amount of distrust in the USA is truly bonkers. What about the conflict of interest for the tax preparers, actual companies with profit as a motive wanting nothing more than to pretend it's all complicated. As the document says, the government prefilling your return is commonplace in many countries. And it actually makes sense when they already have the data. Less work for the taxpayer, fewer mistakes resulting in fewer cases in need of investigation. Everyone wins here... > This risk is particularly high given that the program was intended for and marketed to low income filers who typically rely on their tax preparer as an advocate to ensure their tax payment is as low as legally possible. Over 30% of returns don't even owe federal taxes [1]. So when they file, and get a $1000 credit, it's really crappy to then have to pay $100 or so of that to a tax preparer. > to make it politically unpopular to shut down So the government doing something people like is... Bad? 1: https://www.ntu.org/foundation/tax-page/who-doesnt-pay-income-taxes https://www.ntu.org/foundation/tax-page/who-doesnt-pay-incom...
blfr 2mo ago
They lost 18 months in decision-making, compressing their development timeline. I am not seeing it happen yet but I wonder if this will be the main AI SDLC improvement: you can analyze a ton of docs, build prototypes smoothing the decisions for non-technical stakeholders, and compress development so much that it might actually absorb all the other inefficiencies.
speerer 2mo ago
Just an aside on the design rather than the content: I was wondering for a while about the greenish and yellow bars on the margins of the page, but I'm pretty sure that those are padding to make the document work well on both US letter paper and A4 at the same time! The text area is A4 proportions, so if it were printed, zoomed to size on that paper, the sidebars would simply disappear. No doubt this is a common technique that I'm just noticing for the first time.
Surac 2mo ago
I never would have thought that a irs software would be called direct fire. What about indirect fire? I think of direct and indirect fire in context of artillery
- travisr 2mo ago
  It’s direct file.
letmehelpyou 1mo ago
[flagged]

223 points by ronbenton 2mo ago

There isn’t much to study - it didn’t succeed or fail on the merits - someone didn’t like it because he didn’t create it so it got axed.

ronbenton 2mo ago
I disagree wholeheartedly that there isn’t much to study. Direct File was actually a resounding success, especially when you consider how much difficulty governments tend to have shipping good software products. There is a lot of good information in here that government entities can learn from.
- mixdup 2mo ago
  Including how and why it died. That is an important lesson for the entire governmental enterprise, including all decision-makers, to learn: that government CAN deliver something good and one single person should not be in totalitarian control
  - IncreasePosts 2mo ago
    I think it speaks to doing things "the right way". Direct file could have been mandated by Congress, but it wasn't. Instead it only directed the IRS to do a "study" as a "voluntary agency initiative". That left full control of whether it should be done in the hands of the IRS and the executive branch.
    - throw0101d 2mo ago
      > Direct file could have been mandated by Congress, but it wasn't. Something being mandated by Congress is no protection at times: * https://en.wikipedia.org/wiki/United_States_Agency_for_International_Development https://en.wikipedia.org/wiki/United_States_Agency_for_Inter... (Or the Constitution for that matter it seems.)
      - mikeyouse 2mo ago
        More concretely and timely for this discussion - the beneficial ownership registry was passed in the 2021 NDAA by congress and signed by Biden. So there's a law on the books that FinCEN needs to collect the ownership data for all US companies to prevent money laundering. This week, Bessent decided that the signature policy of the Corporate Transparency Act, a bipartisan effort to stymie cartels and foreign oligarchs, would not only be stopped, but they instructed FinCEN to delete all the records they've already collected. Easily the most lawless gang of corrupt bureaucrats that have ever held office in the US. https://thehill.com/business/6025347-treasury-repeals-beneficial-ownership-reporting/ https://thehill.com/business/6025347-treasury-repeals-benefi...
        Terr_ 2mo ago
        Not a funding issue per se, but Congress also passed a law requiring that the "Epstein files" be released by December 2025. Yet here we are, ~9 months later, and the Republican administration is still violating the law's deadline and its requirements not to black out the names of people who aren't trafficking-victims. Meanwhile, Republican legislators are looking at the people responsible and *checks notes* ... rewarding them with powerful government jobs. [0] [0] https://www.citizen.org/article/todd-blanche-the-epstein-files-a-timeline/ https://www.citizen.org/article/todd-blanche-the-epstein-fil...
    - LastTrain 2mo ago
      Yeah that would have protected it /s
  - locknitpicker 2mo ago
    > That is an important lesson for the entire governmental enterprise, including all decision-makers, to learn: that government CAN deliver something good and one single person should not be in totalitarian control This is only a major epiphany to proponents of a US-based ideological current, and mostly the result of anti-communist cold war propaganda. The rest of the world is well aware that state projects can and do succeed more than they fail.
- firesteelrain 2mo ago
  It had talented software engineers involved including with the marketplace. It succumbed to political forces
pudgywalsh 2mo ago
[flagged]
- pas 2mo ago
  let's say a non-profit hosts it somewhere can people use it to file their taxes for free?
pseudosaid 2mo ago
It didnt happen because Intuit lobbied against it like their business model was in existential crisis. The canary is that inappropriate power imbalances will ruin even the most hard one feats of human collaboration and effort. Its like learning about why jaywalking became a crime, or why recycling is a consumer’s respobsibility. Edit: So I'm about as original as a model can be as I went to go fact check myself and I basically cliff noted an AI summary for yall pre-gen.
margalabargala 2mo ago
I doubt this is the reason. In this particular case, it's more likely that a company such as Turbotax paid a sufficient sum of money to the President or one of his family members in exchange for this consideration.
solarkraft 2mo ago
Then there is that to study
MisterMower 2mo ago
Congress authorized a study, not a full blown system, or even a working prototype. No taxpayers should have ever been allowed to use it to file a tax return. Despite Congress appropriating only $15M to do the study, the program managed to blow through at least $41M, likely more.[1] This included advertising costs in some states to encourage taxpayers to use the system. This would be like your boss asking you to send him an email about the pros and cons of adding a feature, and you going and implementing the feature, pushing it to production, and then asking customers for feedback on it. Whether or not the feature was a success is 100% irrelevant. That’s not how things should be done. We are a nation of laws, and even if the program was a smashing success, there needs to be accountability. 1. https://home.treasury.gov/system/files/131/Report-Replacement-of-Direct-File-2025.pdf https://home.treasury.gov/system/files/131/Report-Replacemen...
- cyberax 2mo ago
  > We are a nation of laws Have you considered doing stand-up comedy?
- LastTrain 2mo ago
  > We are a nation of laws Yeah sorry but to be out here defending the actions of this administration while trotting out that phrase, you either have no self awareness or are a craven liar. Nation of laws SMH…
- Kinrany 2mo ago
  > No taxpayers should have ever been allowed to use it to file a tax return. I see why blowing too much money on the study is a problem. Though this needs to be compared against the norms around this kind of thing. If we wanted these limits to be strict, we would make it actually impossible to spend more. But I do not understand why creating a system and letting people use it would be a problem. "We believe the best way to get this information would be to build a prototype and see how popular it will be" makes perfect sense to me.
  - MisterMower 2mo ago
    > this needs to be compared against the norms around this kind of thing Because other government programs waste money, it must be okay that this one did too? Congress put $15M in the Inflation Reduction Act for the purpose of a study. If they wanted to spend $41M or $400M, don't you think they would have written that number into the law instead? > But I do not understand why creating a system and letting people use it would be a problem I don't know how to say this in any other way: it's because it was not authorized by law. That reason alone is sufficient. This attitude of "well it was for a good cause, I suppose we can just ignore the law in this instance" is the root of many of our problems in this country. At its root it's really just "the ends justify the means" thinking. Today it may be something you support. But tomorrow it's deportations or illegal recess appointments or unlawful searches and seizures. When you allow certain laws to be enforced and others to be ignored you set the stage for tyranny. In many ways we are reaping the harvest of this lax attitude toward how laws are executed in this country. I hope this program serves as an object lesson in why complying with the law may seem tedious but is actually the bedrock of our constitutional order.

Defenestresque 2mo ago

A fascinating , yet sad, post-mortem. Anyone wheeling and dealing along in the shadows between "politics" and "deliverable, functioning product" should read it. Or, I guess, paste the link into Claude or ChatGPT and ask it to summarize for them, lessons learned in bullet points and how it could apply to $their_job. But I'm generally a weirdo who finds these kinds of reports fascinating, so don't purely go on my recommendation.

gradus_ad 2mo ago

Eh, government should not be in the business of maintaining digital infrastructure, regardless of how capable it might be. As much of it as possible should be contracted out to 3rd parties.

compiler-guy 2mo ago
Explain your reasoning at least. The government has to maintain some infrastructure to get this sort of thing done. Whether digital or analog. And if it contracts it out, it needs to oversee it. So no matter how it is done, the government has to pay.
denkmoon 2mo ago
You could just light the money on fire instead and get the same result. Contractors routinely screw the tax payer. I once had a job in one of these third parties where the entire operation was effectively defrauding the tax payer by claiming 1hr jobs would take 40.
- cuuupid 2mo ago
  You are absolutely correct, billable hours are perverse incentives and wrap rates border on predatory, but this status quo is Congressionally mandated and buy commercial as a policy is generally bipartisan.
- socalgal2 2mo ago
  You seem to be under the impression that the government itself doesn't have the same problem. Government agencies often over bill, over budget. They have an incentive to pad everything and to never lower costs because their budget will be lowered otherwise. Contractors on the other hand, have to compete with other contractors so while they can try to over bill, if they bill too much the government has an incentive to switch contractors. Neither system is perfect.
  - wredcoll 2mo ago
    > Neither system is perfect. Yes, thats why people arguing that private companies are always better are so annoying. You get that you're actually agreeing with this post right?

anigbrowl 2mo ago

I was surprised how much I enjoyed reading this. Although it's necessarily opinionate d(the lead author was part of the Direct file team) it comes off as very even-handed, giving equal consideration to successes and failures, and addressing the partisan political environment in factual terms. It's unusually well-written, providing lots of key details or dropping in relevant context without ever losing sight of the big picture and the looming deadlines. I expected to just read the executive summary and then skim the rest, but it held my attention the whole way through.

johnsmith1840 2mo ago

Very basic analysis by da bot says it costs the government roughly 226$ per filing vs a private company 40$. Would love to hear the opposite argument but the point I first saw online is saying the same, that it cost more tax payer money to run than it saved those tax payers. Scale problem? Open to hearing the opposite argument.

ronbenton 2mo ago
It was a pilot and was open to a small subset of taxpayers. It was intentionally not benefiting from economy of scale to incrementally deliver value rather than probably badly trying to hit every use case the first go around. The cost per filing criticism is generally posited in bad faith, by people who don’t understand incremental software delivery, or both
- johnsmith1840 2mo ago
  Ok but why even make it? 40$ per taxpayer filing vs the government doing it with our taxes. I doubt it's going to beat private industry's price. It's not a bad faith argument though. If it cost the gov 40$ or it cost a tax payer 40$ what's the difference?
  - mixmastamyk 2mo ago
    Why should a malicious third party have our financial records? Why would a third party know filing reqs better than the IRS? They already know the data anyway. Other countries have done this for decades already, cheaply.
  - vincnetas 2mo ago
    Is this fixed cost per filling, or does it include cost of developing the system? I somehow doubt that for all Americans to fill taxes it would cost 6.5b$ (163x40) I think its like building a bridge analogy, when it costs you to use ferry only 0.01% of price of the bridge. But when its built its essentially free and ferry goes out of business.

deleted 2mo ago

[deleted]

rexpop 2mo ago

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cuuupid 2mo ago

I was not a fan of Direct File (I think it could have been much better!) but it was objectively in the success bucket: - ~$50M all-in to build which sounds egregious but is small for a government project - mostly good outcomes - ~4y to pilot which also sounds egregious for a single moderate-complexity web app but again is practically lightspeed for a government project People blame it getting shuttered on Trump but this is both a misread and a fundamental misunderstanding of how the government operates. The entire federal government is deliberately paced and primarily driven by a combination of politicals, regulation, budget, Congressional policymaking, and program staffing. The hammer on this was always going to fall, [1] Congress has maintained a "buy over build" policy since literally the Cold War. Ironically the first policy here (1965) was to buy computers from ADP instead of custom-building them. The most impactful "buy commercial" policy (1996) was also IT focused. This was literally codified in several parts of the FAR, and if we're going to be blaming admins, the Trump admin has actually weakened the FAR with the RFO and would be on the other side of this issue. [2] This policy is also the foundation upon which IT contractors like Palantir are built, if you've ever wondered "wtf do they do" they are a commercial contractor that builds custom software for government. So agencies get their custom stuff, Congress is happy they bought commercial, and the only loser is the taxpayer who overpaid a factor of 3-5x. To their credit, Palantir is a huge improvement on the status quo, because they charge by use cases and outcomes, whereas traditional SI's operate on a staffing model and a combination of high wrap rates and perverse incentives with billable hours creates horrible outcomes and ballooning costs. Anyways, there are a lot of commercial vendors that this work "could have" gone to and didn't. It would also have been really easy for them to shop this out because this was shaped really well for GSA MAS or STARS III. [3] When you build things internally with e.g. 18F, one agency is typically the "customer" and pays the other agency (afaik 18F program is nested under the White House). So this really sucks when they walk away; 18F earned a reputation for building things through pilot, blogging about it, puffing their cheeks in the media, sending a bill to the agency, and then running off to the next shiny thing as engineers tend to do. As an agency you save a bit of money initially but now you are left with something nobody knows how to maintain, you have to hire contractors to do it, which by nature has to be a staffing contract, and then the wrap rate alone wrecks you. This happens all the time with commercial vendors, usually when they are outsized or don't get renewed, but obviously upsetting when it happens internally. [4] The author of this piece was part of the team and so as you'd expect this piece is exceptionally biased. The reality is that the IRS self-assessed the maintenance as low and everybody who reports on this treats this as fact when it was not a GAO estimate, which is what carries any actual weight, it was internal IRS estimates and a single independent that mainly assessed call center volume not the actual system. Not only does their reputation precede them here, but their own spend on buildout (~$30M on contractors to help) contradicts the low maintenance narrative. We may never see a GAO estimate here, but the contract would almost certainly go out to TrussWorks, all government contracting data is public and you can look up for yourself how much TrussWorks typically charges the IRS whether directly or thru ATI's vehicles as subawards.

chocolol 2mo ago

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tonetheman 2mo ago

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johnsmith1840 2mo ago

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margalabargala 2mo ago
> All I said was that the cost was higher for tax payers than private industry. Right, yes, generally government services have higher taxpayer costs than private industry that isn't funded by taxpayers... The question, which has not been answered, is: were equal numbers of people to use private vs IRS services, which would at that scale cost more per filing?
- johnsmith1840 2mo ago
  Yeah that was my point and question. It was more expensive but I was wondering if it was just a scale problem. Kinda weird someone can delete comments like that on here.
  - forestrywat 2mo ago
    Your comment wasn't deleted. Are you sure you don't have it minimized? (The minus sign next to it.)
    - johnsmith1840 2mo ago
      Nah it only returned after my comment here
      - forestrywat 2mo ago
        You sure it wasn't database coherency or some other issue on the tech side? Comments are basically never ever deleted here. Even the most vile racist or ableist or homophobic comments just get flagged to death and left up.
        johnsmith1840 2mo ago

MisterMower 2mo ago

The biggest issue with Direct File is the conflict of interest created by having the government who benefits from your tax payment also prepare the return for you. Given the massive amount of IRS shenanigans over the years, it is easy to imagine certain groups unfavored by the government conveniently being led to file returns that cause them to miss out on subsidies they are actually eligible for, or to pay higher taxes based on filing their return in correct but unfavorable ways resulting in higher tax payments than necessary. This risk is particularly high given that the program was intended for and marketed to low income filers who typically rely on their tax preparer as an advocate to ensure their tax payment is as low as legally possible. As other comments have mentioned, the program also exceeded statutory authority. Congress authorized the IRS to study a direct file system, not implement one on a permanent basis. It is a good thing when our government is restrained after it oversteps legal boundaries. This is especially true in the case of this program because it was being intentionally implemented on a massive scale in order to make it politically unpopular to shut down. A program that allows 10% of all tax payers in 25 states is obviously much more than a study.

hvb2 2mo ago
> The biggest issue with Direct File is the conflict of interest created by having the government who benefits from your tax payment also prepare the return for you. The amount of distrust in the USA is truly bonkers. What about the conflict of interest for the tax preparers, actual companies with profit as a motive wanting nothing more than to pretend it's all complicated. As the document says, the government prefilling your return is commonplace in many countries. And it actually makes sense when they already have the data. Less work for the taxpayer, fewer mistakes resulting in fewer cases in need of investigation. Everyone wins here... > This risk is particularly high given that the program was intended for and marketed to low income filers who typically rely on their tax preparer as an advocate to ensure their tax payment is as low as legally possible. Over 30% of returns don't even owe federal taxes [1]. So when they file, and get a $1000 credit, it's really crappy to then have to pay $100 or so of that to a tax preparer. > to make it politically unpopular to shut down So the government doing something people like is... Bad? 1: https://www.ntu.org/foundation/tax-page/who-doesnt-pay-income-taxes https://www.ntu.org/foundation/tax-page/who-doesnt-pay-incom...

blfr 2mo ago

They lost 18 months in decision-making, compressing their development timeline. I am not seeing it happen yet but I wonder if this will be the main AI SDLC improvement: you can analyze a ton of docs, build prototypes smoothing the decisions for non-technical stakeholders, and compress development so much that it might actually absorb all the other inefficiencies.

speerer 2mo ago

Just an aside on the design rather than the content: I was wondering for a while about the greenish and yellow bars on the margins of the page, but I'm pretty sure that those are padding to make the document work well on both US letter paper and A4 at the same time! The text area is A4 proportions, so if it were printed, zoomed to size on that paper, the sidebars would simply disappear. No doubt this is a common technique that I'm just noticing for the first time.

Surac 2mo ago

I never would have thought that a irs software would be called direct fire. What about indirect fire? I think of direct and indirect fire in context of artillery

travisr 2mo ago
It’s direct file.

letmehelpyou 1mo ago

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