Representative Adrian Smith (R-NE), joined by 27 House Republicans, urged President-elect Donald Trump to immediately end the IRS’ free e-filing program after he takes office.
In a December 10 letter, the lawmakers contend that Direct File — which was piloted in 12 states during the last filing season — presents a conflict of interest for the IRS.
The IRS “has little incentive to ensure hardworking Americans do not pay more than they owe in taxes and may instead benefit from families and small businesses paying greater amounts than they are required by law,” reads the letter.
The lawmakers also argue that is it “highly inappropriate” for the IRS to prepare tax filings while also enforcing any violations.
But beyond the conflict of interest, the lawmakers say that the Biden administration and the IRS exceeded their authority in piloting Direct File. While the Inflation Reduction Act provided for an IRS study of a potential free e-filing program, Smith and his colleagues say that actually implementing the program was “clearly outside congressional intent and a blatant overstep.”
The letter also cites the high per-return cost of Direct File in 2024. The lawmakers say the program “is not an efficient use of government resources,” adding that “the private sector offers better tax preparation services at no cost to the federal government. “It also notes that many taxpayers already had a free filing option, Free File, via the “pre-existing public-private partnership between the IRS and many tax preparation and filing software companies.”
Copied on the letter are incoming Department of Government Efficiency (DOGE) heads Elon Musk and Vivek Ramaswamy.
Representative Beth Van Duyne (R-TX), a member of the DOGE Caucus and co-signer of the letter, made the same call to Trump last week. Van Duyne contends Direct File is “an effort to monitor and control Americans’ finances at the expense of the American taxpayer.”
Meanwhile, Representative Don Beyer (D-VA), who sits on the House’s taxwriting committee, quickly weighed in, calling Direct File “a clear success story of making government better.” He accused Republicans of “trying to kill the program and make filing taxes harder.”
Direct File has “saved folks millions of dollars,” said to Representative Mark Pocan (D-WI). “The only logical explanation for such a move is that they’ve prioritized campaign donations from H&R Block & TurboTax over taxpayers like us,” he added.
Back in October, the IRS announced that double the number of states would participate in Direct File for the next filing season. And while the initial Direct File pilot could only be used by taxpayers with certain income sources and who claimed certain credits and deductions, the IRS said it was expanding use cases for 2025.
The IRS expected that 30 million taxpayers would be able to use Direct File in the upcoming filing season — a steep increase over the 140,000 taxpayers who used the e-filing option last season.
Smith’s ask to Trump is the latest in a series of attacks on Direct File. In July, Smith introduced the IRS Overreach Prevention Act (H.R. 9109), which would prevent Treasury from continuing the Direct File program. The bill, which has 18 Republican co-sponsors, also would prohibit the agency from developing a successor free, public, tax return e-filing option.
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