Congressional Democrats and policy groups are urging the Trump administration to continue the IRS’ free e-filing program, Direct File.
Direct File launched last year and was piloted in 12 states. The e-filing tool was made available to taxpayers in 25 states for the 2025 tax filing season. It was also expanded to taxpayers claiming a wider range of tax credits and deductions.
The IRS also rolled out improvements to Direct File this filing season. Those improvements include a data import tool and a chat bot to help taxpayers determine their eligibility for the tool.
Direct File challenges.
The e-filing tool, however, has not been without critics. Opponents say Direct File has a high per-return cost and duplicates options already available from private sector tax preparation companies.
In addition, critics say the Biden administration exceeded its authority in establishing the tool. The 2022 Inflation Reduction Act simply gave the IRS authority to study a potential free e-filing program, not put a program in place, critics contend.
One critic, the National Taxpayers Union Foundation, also argues that Direct File could be “distracting the IRS from other key transformation projects.” The group says that though the IRS was given $4.8 billion for tech modernization under the Inflation Reduction Act, “the creation of Direct File is one of the only major software initiatives that has been implemented from start to finish by the IRS” with the funds.
Weeks before inauguration, a group of House Republican urged incoming President Donald Trump to end the program via a “day-one executive order.” Beyond the cost and legality, they argued it is “highly inappropriate” for the IRS to prepare tax filings while also enforcing violations.
Trump administration actions.
Despite the opposition, Direct File was kept in place for the 2025 tax filing season.
However, in March the digital service team that helped build Direct File was fired. Doing away with this team will hinder further development and expansion of the e-filing tool.
An IRS official also indicated in March that the agency will be pausing its tech modernization efforts, including the Direct File initiative. It will instead focus on potential artificial intelligence-based solutions and agency workforce realignment.
And most recently, post-Tax Day reports circulated that the IRS intends to end Direct File entirely. Treasury and the IRS did not respond to Checkpoint’s request for comments on these reports.
Push to ‘preserve and expand’ Direct File.
Amid the Trump administration’s recent moves to diminish and reallocate resources away from Direct File — and the threat of an end to the program — 175 congressional Democrats sounded an alarm.
In April 21 letter headed up by Senator Elizabeth Warren (D-MA), the Democrats accuse tax preparation companies of spending millions of dollars lobbying against Direct File. The reason, they say, is that the government’s free e-filing program “requires the industry to compete for taxpayer business.”
“Ending this free, easy-to-use, and popular program would be an insult to American taxpayers, eliminating an important alternative to commercial options provided by the tax prep industry,” reads the letter.
Democrat signatories ask Treasury Secretary Scott Bessent and Acting IRS Commissioner Michael Faulkender to commit by May 5 to keeping Direct File in place for next year’s filing season.
A number of groups endorsed the Democrats’ letter, including tax-focused groups like Americans for Tax Fairness and Patriotic Millionaires, and consumer advocates such as Public Citizen and the National Consumer Law Center.
The letter cites the IRS’ own report detailing high Direct File user satisfaction rates in the 2024 filing season. And though the IRS has yet to share data on the 2025 filing season, the Coalition for Free and Fair Filing says third-party data shows Direct File is once again set to receive high reviews.
The Tax Policy Center’s Aravind Boddupalli and Margot Crandall-Hollick also say the program is popular, with “nearly 75 percent of nonelderly adult tax filers expressing interest in using the service if it were available to them.”
A wide demographic is interested in Direct File according to the Tax Policy Center’s survey, which breaks down interest level by family income level, race, age, and educational attainment. Over two-thirds of respondents in all demographic groups say they are interested in using the tool.
Amid the attacks on Direct File despite its popularity with taxpayers, Boddupalli and Crandall-Hollick suggest Congress “consider legislating a free and optional tax filing service.”
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