WASHINGTON (AP) — The Trump administration is set to end the IRS’ Direct File program, an electronic system for filing tax returns directly to the agency at no cost, as reported by two sources familiar with the decision.
Originally launched during Joe Biden’s tenure, the program was praised by users for simplifying the tax filing process, making it quicker and more cost-effective. However, Republican lawmakers and commercial tax preparation companies argued that it was unnecessary, citing the existence of other free filing options that were deemed difficult to navigate.
The fate of the program had been uncertain since the beginning of the Trump administration, as Elon Musk and the Department of Government Efficiency made cuts across federal agencies. Musk announced on his social media platform, X, in February that he had removed 18F, a government entity involved in projects like Direct File.
While there was speculation that Musk and his team could revamp Direct File, the decision to discontinue the program became apparent when IRS staff working on its development were instructed to halt their efforts for the 2026 tax filing season in mid-March.
Sources, who requested anonymity while speaking to The Associated Press, revealed that the decision to terminate Direct File was made without public input. Critics like Adam Ruben from the Economic Security Project criticized the move, claiming that promises of cost-saving for families had been broken. In contrast, David Williams of the Taxpayers Protection Alliance labeled Direct File as problematic due to its costs and low completion rates.
Direct File was introduced as a trial program in 2024, following a directive for the IRS to explore a direct filing system under the Inflation Reduction Act signed by Biden in 2022. Despite the Democratic administration’s significant investment in the program’s development, it faced opposition from private tax preparation companies profiting from taxpayer fees.
Last year, the IRS declared Direct File a permanent offering, but it has faced backlash from industry lobbyists and concerns over its efficacy. The program saw 140,803 accepted returns in 2024, with expansion planned for half the country this year. The exact usage figures for the current tax season remain unclear.
Amanda Renteria, CEO of Code for America, expressed disappointment over the decision, emphasizing the collaborative efforts with the IRS to integrate state tax filing into Direct File.
Senator Elizabeth Warren of Massachusetts, a supporter of expanding Direct File, expressed in a written statement that President Trump and Elon Musk are targeting Direct File to prevent large tax preparation companies from exploiting taxpayers for services that should be provided free of charge. She emphasized that Americans desire a simple and cost-free method to file their taxes, while Trump and Musk aim to eliminate this option.
