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The Trump administration plans to eliminate the IRS Direct File program, a free and government-run electronic tool designed to help Americans file their tax returns quickly and easily, according to two sources familiar with the decision.
The decision deals a final blow to a hallmark project developed under President Joe Biden, which was praised by users for its simplicity, accessibility, and cost-saving potential. The IRS formally paused further development of Direct File in mid-March, notifying staff not to work on it for the 2026 tax season.
“This is sad news for taxpayers and the IRS,” said one of the program’s original architects. “Direct File was a wildly successful government startup. People who used it loved it because it was simple, saved time, and cost them nothing.”
The decision comes amid broader federal cuts led by Elon Musk and the Department of Government Efficiency (DOGE). Musk previously hinted at the program’s demise, posting on X in February that he had “deleted 18F,” the government tech team behind Direct File and other digital initiatives.
From Pilot to Termination
Initially launched as a pilot program in 2024, Direct File operated in 12 states and processed over 140,803 accepted returns from 423,450 logins, according to IRS data. Following positive feedback, the IRS announced last May that Direct File would become a permanent feature of federal tax services and expanded it to cover half the country for the 2025 season.
But as early as 2023, the program had drawn intense opposition from Republican lawmakers and the tax prep industry, including Intuit, the maker of TurboTax, and other firms that profit from paid tax filing services. These companies have spent millions lobbying Congress to oppose government competition.
“Direct File is and has been a solution in search of a problem,” said Derrick Plummer, a spokesperson for Intuit. “It’s a drain on critical IRS resources and a waste of taxpayer dollars.”
Critics Say the Cut Favors Private Industry
Supporters argue the decision caters to corporate interests at the expense of regular Americans. The average U.S. taxpayer spends about $140 on tax preparation annually, a cost many hoped Direct File would eliminate.
“The fix was in from the beginning,” said Adam Ruben of the Economic Security Project. “It is an outrage to see everyday taxpayers play no role in this decision.”
Amanda Renteria, CEO of Code for America, which helped integrate state systems into Direct File, called the move “a betrayal of public trust at precisely the time government should be demonstrating its ability to deliver basic services effectively.”
Senator Elizabeth Warren (D-Mass.) echoed that frustration, stating, “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.”
Bottom Line:
The elimination of Direct File marks a significant policy reversal for the IRS and a symbolic rollback of Biden-era digital government services. Though commercial tax software remains available, advocates argue that ending Direct File strips Americans of a no-cost, government-backed filing option, leaving them again at the mercy of for-profit tax preparers.
