WASHINGTON (AP) — The Trump administration plans to eliminate the IRS’s Direct File program, an electronic system for filing tax returns directly to the agency for free, according to two people familiar with the decision.
The program developed during Joe Biden’s presidency was credited by users with making tax filing easy, fast and economical. But Republican lawmakers and commercial tax preparation companies complained it was a waste of taxpayer money because free filing programs already exist, although they are hard to use.
The program had been in limbo since the start of the Trump administration as Elon Musk and the Department of Government Efficiency have slashed their way through the federal government. Musk posted in February on his social media site, X, that he had “deleted” 18F, a government agency that worked on technology projects such as Direct File.
There was some hope that Musk, with his DOGE team of savvy computer programmers, could take over Direct File and improve it. But the two people familiar with the decision to end Direct File said its future became clear when the IRS staff assigned to the program were told in mid-March to stop working on its development for the 2026 tax filing season.
The two people were not authorized to publicly discuss the plans and spoke to The Associated Press on condition of anonymity.
Adam Ruben, a vice president at the liberal-leaning Economic Security Project, said “the fix was in from the beginning.”
“It is an outrage to see everyday taxpayers play no role in this decision,” he said. “Cutting costs and saving money for families were just empty campaign promises.”
Direct File was rolled out as a pilot program in 2024 after the IRS was tasked with looking into how to create a “direct file” system as part of the money it received from the Inflation Reduction Act signed into law by Biden in 2022. The Democratic administration tens of millions of dollars developing the program.
Last May, the agency announced that the program would be made permanent.
But the IRS has faced intense blowback to Direct File from private tax preparation companies that have made billions from charging people to use their software and have spent millions lobbying Congress. The average American typically spends about $140 preparing returns each year.
The IRS accepted 140,803 returns filed by taxpayers using Direct File in the 12 states where it was available last tax season. It was expanded to include half the country this year. It is unclear how many taxpayers have used Direct File this year.
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Sen. Elizabeth Warren, D-Mass., a proponent for building out Direct File, said in an emailed statement Wednesday that 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. Americans want a free and easy way to file their taxes — Trump and Musk want to take that away.”