The IRS cost estimates for its free online tax filing tool Direct File are not backed by any documentation, with the agency failing to include several key costs in its estimate, according to a recent report by the Government Accountability Office (GAO).
The IRS had estimated that Direct File could cost between $64 million and $249 million annually, the GAO said in an April 9 report. However, the GAO, along with the IRS watchdog Treasury Inspector General for Tax Administration (TIGTA), found that the tax agency “had no documentation to support the underlying data, analysis, or assumptions used for Direct File cost estimates.” In addition, “IRS officials told GAO that the cost estimates did not include start-up costs, such as technology for a novel system, which could be substantial,” the report states.
