The Trump administration is planning to discontinue the IRS Direct File programme, a free electronic tax return filing system, reported Associated Press citing sources.
The IRS Direct File programme, introduced during Joe Biden’s presidency, has been praised for its user-friendly approach to tax filing.
However, the programme has faced criticism from Republican lawmakers and commercial tax preparation companies, who argue that it is an unnecessary expense given the existence of other free filing options, despite these being less accessible.
The Direct File programme’s future has been uncertain since the onset of the Trump administration, with cuts to federal government initiatives by Elon Musk and the Department of Government Efficiency.
Elon Musk, in a post on X in February, claimed to have “deleted” 18F, the agency responsible for technology projects including Direct File.
There was speculation that Musk’s team might adopt and enhance the Direct File system, but this possibility was quashed when IRS staff were instructed to cease development for the 2026 tax season.
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By GlobalDataDavid Williams, president of non-profit advocacy group Taxpayers Protection Alliance, has labelled Direct File as “problematic” from its inception, pointing out the high costs and the number of users who did not complete the filing process.
According to IRS data, out of 423,450 taxpayers who accessed Direct File in 2024, only 140,803 successfully submitted their returns.
Despite the criticism, a key figure behind the creation of Direct File expressed disappointment to Associated Press, highlighting the programme’s success and the benefits it offered to both taxpayers and the IRS.
The programme was initially launched as a pilot in 2024, following the Inflation Reduction Act of 2022, with significant investment from the Democratic administration.
The IRS had declared the Direct File program a permanent fixture in May 2024, but it has come under intense pressure from private tax preparation firms.
These companies, which profit from their own filing software, have lobbied against Direct File, highlighted the publication.
In its last tax season, the IRS received 140,803 returns through Direct File in the 12 states where it was available, and expansion had been planned to cover half the country this year.
