According to two people familiar with the decision, the Trump administration intends to discontinue the IRS’ Direct File program, an electronic method for submitting tax returns to the IRS directly for free.
Users commended the software created during Joe Biden’s presidency with making tax filing simple, quick, and affordable. However, commercial tax preparation firms and Republican politicians argued that it was a waste of government funds because there are existing free filing services, albeit they are difficult to use.
Since the beginning of the Trump administration, the initiative has been in limbo while Elon Musk and the Department of Government Efficiency have cut their way through the federal government.
In February, Musk announced that he had “deleted” 18F, a government organization that focused on technology projects including Direct File, on his social media platform X.
There was some optimism that Musk could take over Direct File and make it better with his DOGE team of computer programmers.
However, when the IRS employees assigned to the program were instructed in mid-March to cease developing it for the 2026 tax filing season, the future of Direct File became certain, according to the two persons familiar with the decision to discontinue it.
The liberal Economic Security Project’s vice president, Adam Ruben, claimed that “the fix was in from the beginning.”
“It is an outrage to see everyday taxpayers play no role in this decision,” he stated. “Cutting costs and saving money for families were just empty campaign promises.”
However, David Williams, president of the Taxpayers Protection Alliance, a nonpartisan group that disseminates research and analysis on how the government affects the economy, claimed that Direct File was “problematic” from the beginning, pointing to the program’s expenses and the fact that many individuals who began the process never completed it.
In 2024, 140,803 taxpayers filed accepted returns, while 423,450 taxpayers logged into Direct File, according to the IRS.
“From hidden costs to taxpayer confusion, the program is riddled with issues,” Williams stated.
In a statement, one of the program’s initial designers said, “this is sad news for taxpayers and the IRS. Direct File was a wildly successful government startup, people who used the tool loved it because it was simple, saved time and cost them nothing.”
After the IRS was given funds from the Inflation Reduction Act, which Biden signed into law in 2022, to investigate the development of a “direct file” system, Direct File was introduced as a trial program in 2024.
The initiative took tens of millions of dollars to establish during the Democratic administration.
The agency declared in May of last year that the program would become permanent.
However, private tax preparation firms that have generated billions by charging taxpayers to use their software and spent millions lobbying Congress have fiercely criticized the IRS for Direct File.
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The average American spends roughly $140 annually on tax preparation.
“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,” said Derrick Plummer, a spokesman for the commercial tax preparation firm Intuit.
During the previous tax season, 140,803 returns submitted by taxpayers in the 12 states where Direct File was accessible were accepted by the IRS.
This year, it was extended to cover half of the nation. The number of taxpayers who have used Direct File this year is unknown.
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The move was described as “a betrayal of public trust at precisely the time government should be demonstrating its ability to deliver basic services effectively” by Amanda Renteria, CEO of Code for America, which collaborated with the IRS to develop a state tax filing integration program for Direct File.
Trump and Musk “are going after Direct File because it stops giant tax prep companies from ripping taxpayers off for services that should be free,” according to a statement from Sen. Elizabeth Warren, D-Mass., who supports expanding Direct File.
Trump and Musk want to remove the free and simple tax filing option that Americans desire.
