The Trump administration is planning to eliminate the IRS Direct File program—that’s the word of out Washington, D.C. While Republican lawmakers had previously targeted the program, the free tax software program had been marked as safe for the 2025 season, with now Treasury Secretary Scott Bessent committing to the program during his confirmation hearing. “I will commit that for this tax season … Direct File will be operative,” Bessent said. However, less than 48 hours after the end of the regular tax filing season, AP News reported that the program will be axed.
Direct File
The controversial Direct File program allows eligible taxpayers to file taxes directly with the IRS online for free. The word “controversial” is a nod to the fact that while the IRS touts the program as beneficial to taxpayers and says the initial feedback was overwhelmingly positive, some Republicans in Congress weren’t happy with the program.
As part of the Inflation Reduction Act, Congress tasked the IRS with delivering a report on, among other things, the cost of developing and running a free direct e-file tax return system. The report was to include he costs to build and administer each release, with a focus on multi-lingual and mobile-friendly features and safeguards for taxpayer data. The IRS released the report to Congress in May 2023.
According to the report, most taxpayers surveyed by the agency had interest in using an IRS-provided tool to prepare and file their taxes. At the time, the IRS indicated it hoped to make that a reality for some taxpayers for the 2024 tax filing season.
At the same time, House Republicans proposed an appropriations bill that would bar the IRS from using funding to develop or provide a free direct-file tax return system without the prior approval of the Committees on Appropriations of the House and the Senate, the House Ways and Means Committee, and the Senate Finance Committee. The House failed to pass a long-term appropriations bill, and the short-term funding bill did not address any direct file tax program.
When the tax filing season opened in January 2024, the IRS announced the limited-scope pilot of Direct File, which it claimed would allow the IRS to evaluate the costs, benefits, and operational challenges associated with providing the option to taxpayers. The pilot, the IRS claimed, was a success. The tax agency said that Direct File users reported a high degree of satisfaction and quick answers to their filing questions.
In a GSA Touchpoints survey of more than 11,000 Direct File users, 90% of respondents ranked their experience with Direct File as “Excellent” or “Above Average.” Most survey respondents who filed taxes in the prior year reported having to pay to prepare their taxes last year. Among survey respondents, 47% of users paid to file their taxes last year, and 16% did not file last year at all. When asked what they particularly liked, respondents most commonly cited Direct File’s ease of use, trustworthiness, and that it was free. According to the IRS, taxpayers filed—for free—to obtain more than $90 million in refunds and saved an estimated $5.6 million in filing costs.
(You can read what some taxpayers had to say to Forbes about their experiences here.)
After the first year, the Treasury Department declared that Direct File would be a permanent, free tax filing option. The IRS also expanded the program in 2025 to include more states and the ability to handle more kinds of income, credits, and deductions.
Direct File In DOGE Crosshairs
Direct File made news early in the filing season when Musk posted on X (formerly Twitter) that he had “deleted” 18F, the group responsible for creating the technology behind the program. The tweet was in response to a post suggesting that “the far left government wide computer office” was recently taken over by Musk allies. That caused some users on social media to incorrectly report that the program itself had been axed in February (it remained open).
18F was not a group inside the IRS but a team of designers, software engineers, strategists, and product managers within the General Services Administration (GSA). The team collaborated with other agencies to fix technical problems, build products, and improve public services through technology. As of last year, 18F had completed 455 projects for 34 agencies and the Executive Office of the President, the Library of Congress, and the U.S. House of Representatives.
Shortly after the tweet, the team’s Twitter profile read, “This account doesn’t exist.” On March 1, 2025, the group was officially shut down.
That wasn’t the first time that Musk made news with Direct File. Shortly after the election, Musk and Ramaswamy, at that time leaders of the Department of Government Efficiency (DOGE), reportedly discussed creating a mobile app for Americans to file their taxes free with the IRS. That program already existed—Direct File.
(Ramaswamy later announced he was leaving DOGE to run for office.)
IRS Free File
Critics of the program point to Free File, an existing program offered as part of a public-private partnership between the IRS and Free File Inc., formerly the Free File Alliance. Through this partnership, tax preparation and filing software providers make their online products available to eligible taxpayers (as compared to Direct File, an IRS program).
Free File debuted in 2003, but not without controversy. It was developed to provide free e-filing services to most taxpayers, with the idea that it could help the IRS meet the 80% e-file target established by the Restructuring and Reform Act of 1998.
At the time, many wondered why the federal government partnered with the private tax prep industry instead of creating its own software. In 2002, Treasury Secretary Paul O’Neill made it clear to then IRS Commissioner Charles Rossotti that the agency should partner with the private sector. As a result, the government entered into a memorandum of understanding pledging not to enter the tax return software and e-file services marketplace.
You’d assume taxpayers would flock to e-file for free. The e-file market did explode, but not necessarily for free services, leading to allegations that some providers were directing taxpayers to paid services. In 2019—the last year the Free File agreement was signed—up to 100 million taxpayers, or 70% of filers, were eligible to use Free File. The actual use was closer to 3%.
In 2016, then-Forbes staffer Sam Sharf wrote an account of how, even though she qualified for free filing, it cost her $118.64 to file her 2014 tax return with TurboTax. A few years later, ProPublica wrote a series of articles focusing on the lengths that it claims tax software companies took—like extensive lobbying and hiding free options—to get taxpayers to pay for services. In April 2019, ProPublica noted, “Intuit has changed the code on its Free File page so that the actually free version of TurboTax is no longer hidden from Google and other search engines.” H&R Block was also accused of purposefully steering taxpayers away from free products.
The allegations created quite a stir—and resulted in litigation.
Today, tax preparation software companies are prohibited from hiding free filing services from Google or other search results pages. Additionally, if you can’t file for free after visiting a company’s Free File website, you must be able to return to the Free File website to find another offer. Each IRS Free File company must provide information when you don’t qualify, with a link to the IRS.gov Free File site.
Following the changes, two traditional Free File participants, Intuit and H&R Block, opted out of the program. Eight private-sector Free File partners provided online guided tax software products in 2025: 1040.com, 1040Now, EzTaxReturn, FileYourTaxes.com, FreeTaxUSA, OnLine Taxes, TaxAct, and TaxSlayer.
Reactions
Amanda Renteria, who serves as Chief Executive Officer for Code for America, a civic tech nonprofit, called it “a dark day for Americans who want a simple, free option to file their taxes electronically directly with the government.”
“The decision to kill Direct File comes at a critical moment,” she says, “when faith in public institutions is already at historic lows. This isn’t just a step backward for tax administration—it’s a betrayal of public trust at precisely the time government should be demonstrating its ability to deliver basic services effectively.”
Renteria also touted the program’s success, noting, “At Code for America, we know better than anyone that launching an effective new government software product is incredibly hard. Despite the immense challenge of making tax e-filing free and easy, Direct File worked remarkably well thanks to the hard work and talent of IRS staff. The vast majority of survey respondents said the product was easy to use and gave high marks for their experience. We anticipated that the future of the program—one complete with expansion to more tax situations and more states, featuring more automation, and available to more taxpayers over time—would build upon this strong foundation.”
What Comes Next
It’s unclear how many taxpayers took advantage of the program in the most recent filing season. According to the IRS, 423,450 taxpayers logged into Direct File as part of the pilot program, and 140,803 submitted accepted returns in 2024. The IRS had expected those numbers to go up sharply. With the program’s demise, those taxpayers will have to find another option in 2026.
For now, the Direct File page on the IRS website notes, “The federal tax filing deadline has passed, but you can use Direct File until October 15.”