The federal government is making a move to kill IRS Free File programs and Americans who rely on these programs could lose out. This decision has been backed by Republican senators and commercial tax prep firms. The move to eliminate the IRS Direct File system has drawn political and public criticism because it helped taxpayers file their returns freely and with ease.
The IRS Free File program was launched in 2024 as a pilot under the Biden Administration to modernize and simplify the process of filing taxes. Using the program, eligible taxpayers in select states were able to file returns directly with the IRS online, free of charge and with no need for third-party software. Over 140,000 tax returns were successfully submitted through Direct File in the first year. By 2025, the program was expanded to 25 states, making it accessible to about 30 million Americans with simple tax needs.
Unfortunately, the government is planning to kill IRS Free File programs starting with Direct File. Despite its growing use, and the praise it received for streamlining tax season, it is reported that the IRS privately asked staff to stop development of the program for the 2026 filing year and this signals the end of the Direct file.
Trump, Elon Musk, and GOP Lawmakers Lead the Charge
The decision to halt the IRS Direct File system is led by the Department of Government Efficiency (DOGE), a department led by Elon Musk and mandated by Trump’s administration to reduce government spending and modernize infrastructure in government agencies. Although there was speculation that DOGE would take over the system and improve it, it never came to pass.
The Senate Finance Committee has also proposed a formal legislation to end both Direct File and the longer-running Free File program which enables taxpayers earning below $84,000 per year to file returns. Their amendment to the “One Big Beautiful Bill Act” would terminate these services and explore a new public-private partnership to potentially replace them with industry-led alternatives.
Who Benefits from Killing Free File?
Those pushing to end IRS Free File programs argue that they are a waste of taxpayer money and redundant. According to David Williams of the Taxpayers Protection Alliance, Direct File was problematic from day one because of drop-off rates and hidden costs. However, critics against killing the program argue that this view is influenced by commercial tax prep companies who profit from charging Americans to file returns.
Firms like Intuit which owns Turbotax, have spent millions lobbying Congress to oppose IRS-run filing options. A spokesman for the company termed Direct File as “a solution in search of a problem.” If the government eliminates free alternatives and forces taxpayers to return to paid services, these companies will benefit considering that the average filing costs about $140 per return.
Amanda Renteria, CEO of Code for America, which helped design the integration for Direct File, called the decision “a betrayal of public trust.” Sen. Elizabeth Warren also criticized the move, stating that President Trump and Elon Musk are planning to end Direct File because it prevents giant tax prep companies from ripping taxpayers off for services that should be free.
Public Pushback and Uncertain Future
The move to kill the IRS Free File program has been criticized heavily. Around 200 Democratic lawmakers signed a letter to Treasury Secretary Scott Bessent in April urging him to extend Direct File for another year. They warned that killing the program would be an insult to American taxpayers and that it would make them vulnerable to being ripped off by the expensive commercial tax prep industry.
While an official termination date has not been announced yet, the Senate plans to vote on its proposal by July 4 after which the bill would return to the House and then to the president’s desk. Until then, the future of the IRS Direct file remains uncertain.
Conclusion
The government’s move to kill IRS Free File programs is not just a policy change but a change that could cost millions of Americans both money and convenience. As lawmakers and tech executives reshape the future of the IRS, taxpayers could suffer the cost.