DOGE shutters the government’s in-house tech consultancy . . Political loyalty appears to be more important than tech skills

Over the next month or so, many Americans filing their tax returns have a new option. Instead of paying an accountant, or buying third-party software, they can log onto a government website, which will automatically input personal details of their wages earned and tax already withheld from the Internal Revenue Service’s data. The tool, called Direct File, is available this year to around 30m taxpayers in 25 states.

The creation of Direct File was in large part the work of 18F, an in-house government tech consultancy. On March 1st Thomas Shedd, a former Tesla engineer who is the new head of the government’s larger Technology Transformation Services, in which 18F is embedded, announced its abolition. Just weeks before, Mr Shedd had said the group’s employees represented “the gold standard” of tech in government.

The consultancy was created in 2014 after glitches hobbled the launch of Healthcare.Gov, the website intended to help Americans find health plans under Obamacare. The idea was to create a group of cross-agency tech experts able to modernise IT systems and improve procurement, says Christopher Whitaker, the director of the Alliance of Civic Technologists, a support network. Waldo Jaquith, a former employee, says he and three others once saved $500m in four days while working with the Department of Defence by identifying and cancelling a software project that was already being duplicated elsewhere.

In some ways that makes 18F’s work close to what Elon Musk’s “Department of Government Efficiency” claims to be doing. Its shut down, former employees say, suggests doge’s agenda is more about loyalty and ideology than efficiency. The consultancy had long attracted conservative ire. Its logo on X, Mr Musk’s social-media network, featured the transgender-rights pink and rainbow flag. On February 3rd Mr Musk claimed to have already “deleted” the group. One month later it is gone.

Reproduced from The Economist, 6 March 2025.

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Heartlander · 80-89, M

I can only imagine the complexity of Direct File and the mess it would leave behind :)

Automated tax filing only works for for tax filers whose taxes are so simple that they don't need a computerized system beyond putting the numbers in the right boxes :)

For everything beyond a simple need, there are too many uncertainties, too many variables, etc. For example, even with a simple return, whether a couple is best served by filing joint or separate in some cases may be determined by state income tax laws. And since the federal system doesn't do state taxes, an auto filer may end up paying more taxes total. To further complicate things, I believe that once filed, a decision to reverse the joint-separate option may not be allowed.

Another issue is that IRS and state revenue instructions in many cases aren't finalized until the last minute, leaving no time for programmers to adjust the software. This and the sheer complexity of our tax system makes this a $billion project.

There is also a time gap issue issue. Employers deadlines for sending W2/W3/1099s data to social sec adm is the end of January. However, K-1 data isn't due to the IRS until March 15th. So the earliest realistic time that that the IRS would know enough about you to auto file a 1040 would be about April 1st, but that's assuming that employers and others file timely reports, and considering the volume of mail the Social Security Administration and IRS likely receives during the first week of February and the las weeks of March, I have to imaging it would take more than a few days to convert it to computer data.

SunshineGirl · 36-40, F

@Heartlander The vast majority of taxpayers in a modern economy have extremely straightforward tax affairs that do not require professional advice. The UK tax code is almost as complex, but it is made less so for most people by PAYE (where responsibility lies with the employer) and a well-designed self-assessment system. If your income comes from multiple sources and you feel you may be missing out on an allowance, by all means employ an accountant. But the only reasons I can think of for not investing in this IT are a general reluctance to pay income taxes fillstop and the entrenched interests of the private sector financial services industry.

MasterLee · 56-60, M

@SunshineGirl do a lot of income tax filing in the US from Britain?

Heartlander · 80-89, M

@SunshineGirl The US doesn't have a straight forward tax affairs, which make me see this as yet another Solyndra.

Most US households have multiple sources of income and pay multiple taxing authorities and have an assortments of income deductions and tax credits without universal entitlement. Meaning that one is entitled to the deduction or credit based on individual circumstances. Put all this together and practically every American would benefit from a non-government tax advisor or accountant. I just checked, and the IRS printed instruction manual for the IRS Form 1040 (the basic tax form for individuals and couples) is 113 pages long, with tiny print. And within those instructions are hundreds of references to yet other instruction manuals.

Has nothing to do with either a reluctance or enthusiasm to paying taxes.

Heartlander · 80-89, M

@MasterLee (sniff-sniff)

Has woke liberalism been globalized?

SunshineGirl · 36-40, F

@MasterLee I wrote a university dissertation comparing the two systems.