The Trump administration plans to eliminate the IRS’ Direct File program, an electronic system for filing tax returns directly to the agency for free, according to two people familiar with the decision. The program, which developed during Joe Biden’s presidency, was credited with making tax filing easy, fast, and economical. However, Republican lawmakers and commercial tax preparation companies have complained that it was a waste of taxpayer money because free filing programs already existed, though they are often hard to use.
The program had been in limbo since the start of the Trump administration as Elon Musk and the Department of Government Efficiency undertook numerous federal cutbacks. Musk indicated earlier this year that he had “deleted” 18F, a government agency that worked on technology projects such as Direct File. There was some hope that Musk’s team could take over and improve Direct File.
However, the decision became clearer when IRS staff assigned to the program were informed in mid-March to stop working on its development for the 2026 tax filing season. Adam Ruben, a vice president at the Economic Security Project, criticized the decision, stating, “It is an outrage to see everyday taxpayers play no role in this decision. Cutting costs and saving money for families were just empty campaign promises.”
Conversely, David Williams, president of the Taxpayers Protection Alliance, cited issues with the program’s costs and its low completion rate.
According to the IRS, 423,450 taxpayers logged into Direct File, but only 140,803 submitted accepted returns in 2024.
Ending IRS direct file program
“From hidden costs to taxpayer confusion, the program is riddled with issues,” Williams said.
An original architect of the program described the news as a sad day for taxpayers and the IRS. “People who used the tool loved it because it was simple, saved time, and cost them nothing.” The program was initially rolled out as a pilot in 2024 as part of the Inflation Reduction Act signed into law by Biden in 2022. The IRS had announced that Direct File would be made permanent.
However, it has faced intense opposition from private tax preparation companies, which have profited significantly by charging for their software and spent millions lobbying Congress. The average American typically spends about $140 preparing tax returns each year. Derrick Plummer, a spokesperson for Intuit, one of these companies, claimed that “Direct File is and has been a solution in search of a problem, a drain on critical IRS resources and a waste of taxpayer dollars.” The IRS accepted 140,803 returns through Direct File in the 12 states where it was available last tax season.
It was expanded to include half the country this year. Amanda Renteria, CEO of Code for America, which worked with the IRS on a state tax filing integration program for Direct File, called the decision “a betrayal of public trust at precisely the time government should be demonstrating its ability to deliver basic services effectively.”
Sen. Elizabeth Warren, D-Mass., a proponent of Direct File, stated that the administration seeks to dismantle it because it prevents tax prep companies from overcharging taxpayers.
“Americans want a free and easy way to file their taxes — Trump and Musk want to take that away,” she said.
