Editor’s Note, 4/18/2025: Article updated with additional quote from Economic Security Project.
Lawmakers and tax policy organization officials sounded off against the Trump administration’s reported intention to end the IRS’ free e-filing program after the only tax filing season it was available to taxpayers nationwide and in partnership with two-dozen state revenue agencies.
About Direct File. The IRS used Inflation Reduction Act funds to develop an electronic tax filing platform in which taxpayers can complete and submit annual tax returns directly with the IRS. A slimmed-down test pilot served as a demo during tax season last year. Twelve states participated in the pilot, allowing taxpayers under an income threshold with less complex returns to voluntarily participate Direct File.
According to survey results of the pilot, taxpayers were overall pleased with Direct File, reporting that it was easy to use and saved both time and money. Congressional Republicans opposed the program since its inception, pointing to the cost of building the software and future projected costs of bringing on more states and more tax situations like certain credits, deductions, and sources of income.
Critics also say there is not a need for Direct File since there is already the Free File collaboration between the IRS and certain third-party tax preparation companies.
The future of Direct File became uncertain following the 2024 election cycle where President Trump and Republicans secured a trifecta and gained control of the White House and both chambers of Congress. Former IRS Commissioner Danny Werfel, appointed by former President Biden, championed the Direct File effort before resigning from his post as Trump took office.
This uncertainty proliferated with the advent of the Department of Government Efficiency (DOGE) and widespread cuts to the IRS. Elon Musk, who once led DOGE, previously posted on his social media platform X that the Direct File development team known as 18F had been “deleted.” This caused confusion over the availability of Direct File and whether it had already been axed. But Direct File was live through April 15.
Reported end to Direct File. The Associated Press reported Wednesday that President Trump plans to end Direct File soon, based on tips from anonymous administration sources.
According to AP, staff were informed about a month ago that they will no longer be working on Direct File for the 2026 tax season, indicating the end was near for the program. So far, however, there has not been an official announcement.
Checkpoint did not immediately receive a response from the IRS to verify the report and confirm if Direct File will be discontinued. By Thursday, though, many in the tax community expressed their displeasure with the prospect of Direct File going away after just one tax season at full capacity.
Senate Finance Committee Ranking Member Ron Wyden (D-OR) said in a statement that the program was a “massive success” and cut out an unnecessary middleman that took money out of Americans’ pockets for no good reason.” Wyden continued in saying Trump and Treasury Secretary Scott Bessent “are robbing regular American families to pay back lobbyists that spend millions to make tax filing more expensive and more difficult.”
Jon Whiten, deputy director of the Institute on Taxation and Economic Policy, said the decision hands a free win to Intuit TurboTax and H&R Block, two companies that were once part of the IRS Free File Alliance before opting out in recent years.
“Direct File had tremendous potential to make tax filing less expensive, faster, and easier for millions of Americans,” said Whiten. “By breaking down barriers to filing, it was also poised to help more low- and moderate-income families get tax credits they’re eligible for, like the Earned Income Tax Credit and Child Tax Credit.”
On Monday, Wyden, Senator Elizabeth Warren (D-MA), and Representative Mark Pocan (D-WI) sent a letter to Intuit CEO Sasan Goodarzi challenging true price of the “free” edition of TurboTax and the company’s concentrated spending on lobbying efforts against Direct File.
“Last month, Senator Warren’s staff conducted a sample session using TurboTax for a simple tax filing situation, finding that the sample taxpayer would-despite promises by TurboTax that its services are free-pay $128 to file their taxes, while being upsold multiple times in the process,” read the letter. “In comparison, the cost for that same taxpayer would be $0 on Direct File-with no upselling.”
In 2022, the Federal Trade Commission called attention to Intuit’s advertising practices, which culminated in a January 2024 court order barring the company from misrepresenting its “free” version of TurboTax. Intuit also paid $141 million in settlement payments to customers as part of the false advertising investigation. H&R Block, meanwhile, also received an FTC order to pay $7 million to customers as part of a similar legal battle over its advertising.
“A tool that allows people to file taxes for free, in less than an hour, is a powerful example of how efficient-and cost-effective-government can be for millions of Americans,” said Adam Ruben, vice president of campaigns and political strategy at the Economic Security Project, a pro-Direct File advocacy group. “Ultimately, Direct File delivers on its promise, and the Administration’s decision to end the program would show their loyalty to big corporations and the wealthy at the expense of American families.”
But David Williams, Taxpayers Protection Alliance president, disagreed that Direct File was ever meant to exist in the first place. “The IRS created Direct File without congressional approval,” Williams posted on X, directly responding to a quote from Ruben in AP’s original story. “In fact, the $15M from the Inflation Reduction Act was supposed to be for a study. Instead, the IRS built the software.”
Ruben told Checkpoint that Direct File that there is a “98% user satisfaction rating” among taxpayers as of the close of tax season, demonstrating that the program served a need and its “overwhelming popularity” justifies its continuation.
But this year, less users participated than expected, for which Ruben attributes to the administration’s hostility toward Direct File.
“Musk and DOGE ordered the agency to stand down from public promotion and outreach … fired critical agency personnel, and took steps to weaponize taxpayers’ sensitive data,” said Ruben. “All of these actions lowered public trust and confidence in Direct File — and, more broadly, in the capabilities of the IRS — leading to a decline in uptake.”
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