The IRS Direct File pilot program, as it stands, could potentially provide free, government-run electronic filing, which would directly compete with for-profit tax preparation software that has been inciting demand for such a public option. However, the program’s success depends heavily on conquering major hindrances such as bandwidth access in rural areas, availability of devices capable of internet access, and public library staffing and resources.
This initiative could spur broader action around digital inclusivity and equity. Given that the successful deployment of Direct File is contingent upon equitable and widespread broadband access, there is a pressing need for innovative solutions and increased funding to bridge the growing digital divide.
Possible short-term alternatives to widespread broadband that are currently on the table include subsidized satellite internet and efforts to enhance the capabilities and funding of public libraries. These vital community hubs could potentially serve as access points for digital tax services and supplement the Volunteer Income Tax Assistance program.
Despite the fact that virtually 90% of individuals under the age of 50 have home broadband access in the US, this figure alters to roughly 70% for those aged 65 and over, according to data from the Pew Research Center. Moreover, federal broadband connectivity programs for less advantaged households are due to end and will likely run out of funding, potentially disrupting access to an estimated 23 million additional households, according to the Federal Communications Commission.
In geographic terms, many Americans residing in rural areas and on American Tribal lands do not have stable broadband access, and this problem is exacerbated by socioeconomic stratification, particularly in rural affordable housing. One potential short-term solution for these areas could be subsidized satellite internet, which would provide reliable high-speed internet to underserved communities and ensure that they can access vital government services which require an internet connection.
According to the 2022 census data, nearly 95% of homes own a computer, including smartphones in the definition. Around 20% of young adults and 16% of those over 65 in the US, according to a Pew survey, are solely dependent on a smartphone for internet access. But even though IRS states that Direct File is “mobile-friendly“, it remains to be seen if households relying only on smartphones have the same degree of ease using this service as those with larger, more robust devices to handle their filing obligations.
Public libraries play a central role in providing internet access to less affluent individuals and often host tax services, making them key institutions for tax prep information. The existing VITA program could greatly enhance Direct File’s reach by providing more technical training for its volunteers on the specifics of Direct File, and additional funding should be allocated to this program.
As digital government services continue to be developed and improved, it’s crucial to remain focused on the key goal of increasing access to essential services. Equitable internet access is vital as more government services shift online and the risk of digital exclusion therefore grows. As more government services move onto the open internet, government needs to take care to ensure access so the internet is not only available but equitably distributed among all demographic groups.
The author, Andrew Leahey, is a tax and technology lawyer, principal at Hunter Creek Consulting, and adjunct professor at Drexel Kline School of Law.
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