WASHINGTON D.C. – The Trump administration is reportedly planning to dismantle the IRS Direct File program, a free electronic tax filing system championed during the Biden presidency, according to inside sources speaking with the Associated Press. The move signals a major shift in tax filing accessibility for millions of Americans.
Direct File, launched as a pilot program in 2024 and expanded in 2025, was lauded by users for its simplicity and cost-effectiveness. However, it faced staunch opposition from Republican lawmakers and commercial tax preparation companies, who argued it was a redundant and wasteful expenditure of taxpayer funds.
The program’s fate has been uncertain since the Trump administration took office, particularly with Elon Musk’s Department of Government Efficiency spearheading sweeping federal budget cuts. Musk had previously announced the “deletion” of 18F, the government agency involved in Direct File’s development, raising questions about the program’s future.
Sources familiar with the decision, speaking anonymously due to lack of authorization, disclosed that IRS staff were instructed in mid-March to cease development on Direct File for the 2026 tax season, effectively signaling its termination.
“The fix was in from the beginning,” asserted Adam Ruben, vice president of the Economic Security Project, a liberal-leaning organization. “Everyday taxpayers have been shut out of this decision. Cutting costs and saving money for families were nothing more than empty campaign promises.”
Conversely, David Williams, president of the Taxpayers Protection Alliance, argued that Direct File was “problematic” from its inception, citing its high costs and low completion rates. IRS data reveals that while 423,450 taxpayers accessed Direct File in 2024, only 140,803 successfully submitted returns.
A key architect of the Direct File program expressed “sadness” over the decision, highlighting its simplicity and cost-free benefits for taxpayers.
The program, funded by the Inflation Reduction Act of 2022, was met with intense lobbying efforts from private tax preparation companies, which generate billions from charging taxpayers for their services. The average American spends approximately $140 annually on tax preparation.
Derrick Plummer, a spokesperson for Intuit, a leading tax preparation company, labeled Direct File “a solution in search of a problem, a drain on critical IRS resources, and a waste of taxpayer dollars.”
While Direct File processed 140,803 returns in its initial 12-state rollout, the program’s usage figures for its expanded 2025 reach remain unclear.
Amanda Renteria, CEO of Code for America, which collaborated with the IRS on Direct File’s state tax filing integration, condemned the decision as “a betrayal of public trust.”
Senator Elizabeth Warren (D-Mass.), a vocal proponent of Direct File, accused Trump and Musk of targeting the program to protect the profits of “giant tax prep companies.” “Americans want a free and easy way to file their taxes—Trump and Musk want to take that away,” she stated.
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