The Trump administration is planning to shut down the IRS Direct File program, a free tax filing option created under former President Joe Biden, according to an Associated Press report.
The move has sparked a fierce backlash from consumer advocates and progressive lawmakers who say it will benefit commercial tax prep giants like TurboTax and H&R Block at the expense of everyday taxpayers.
Critics Say Taxpayers Lose, Corporations Win
Former FTC Chair Lina Khan had something to say about it: “Direct File let people file their taxes for free. The Trump administration plans to end the program. A big gift to TurboTax and H&R Block,” she said on X.
Sen. Elizabeth Warren (D-MA) echoed that sentiment, writing, “Americans want a free and easy way to file their taxes — Trump and Musk want to take that away.”
Advocacy groups also weighed in.
Amanda Renteria of Code for America called the move “a betrayal of public trust at precisely the time government should be demonstrating its ability to deliver basic services effectively.”
Adam Ruben from the Economic Security Project said, “It is an outrage to see everyday taxpayers play no role in this decision. Cutting costs and saving money for families were just empty campaign promises.”
What Was Direct File?
Launched as a pilot in 2024, the IRS Direct File program allowed taxpayers in select states to file their federal taxes online for free, directly with the IRS.
It was designed to make filing simpler and cheaper, especially for low- and middle-income Americans.
According to the IRS, more than 140,000 people submitted returns through Direct File during its initial rollout.
The program came out of the Inflation Reduction Act, signed into law in 2022, which gave the IRS funding to explore a government-run filing tool.
Last year, the agency announced plans to make the program permanent and expand it to half the country for the 2025 tax season.
Trump and Musk Pull the Plug
The plan to scrap Direct File came after Elon Musk and the Department of Government Efficiency (DOGE) began cutting various tech-related government programs.
Musk even announced on X in February that he had “deleted” 18F, a federal tech agency that helped build Direct File. The announcement sparked confusion and criticism online, with several users questioning why a program that was seen as a positive step toward simplifying taxes had been axed.
Some asked what would replace it, while others argued that scrapping something that made life easier for taxpayers seemed counterproductive.
One user posted: “Direct File is a good idea, though. Taxes should be simple to file, and you should not need to spend hundreds of dollars and hours of your time to file tax return (at least for majority of people who have single source of income per person).”
Two people familiar with the decision told the AP that IRS staff were told in March to stop working on the program for the 2026 season, effectively ending the project.
The Treasury Department has yet to publicly confirm the move, but the writing seems to be on the wall.
Critics of the Program Say It Was Redundant
Opponents argue that Direct File was unnecessary.
David Williams of the Taxpayers Protection Alliance said it was “problematic from day 1,” noting that many users didn’t complete the filing process.
“From hidden costs to taxpayer confusion, the program is riddled with issues,” he said.
A spokesperson for Intuit, which owns TurboTax, claimed Direct File was “a solution in search of a problem” and a “waste of taxpayer dollars.”
Online, some users supported the shutdown, pointing out that IRS Free File already exists for those earning under $48,000, although critics say it’s hard to access and often redirects users to paid services.
Others questioned the idea of anything being truly “free,” since taxpayers ultimately fund government services.
Still, many users argued that the current system is designed to confuse people into paying for services they might not need.
As one commenter put it: “Shouldn’t people be able to e-file for free if their taxes are relatively simple?”
What Happens Next?
As of now, the IRS has not officially confirmed the end of Direct File, but with staff pulled from the project and no plans for the 2026 season, it appears to be winding down.
Meanwhile, companies like TurboTax and H&R Block are poised to continue dominating the tax prep market — and charging Americans an average of $140 a year to do so.
Whether voters will see this as a win for private business or a loss for working families remains to be seen.
IMAGE CREDIT: “Donald Trump” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.