Trump Kills Free Tax Filing Program
Qui bono?
AP (“Trump administration plans to end the IRS Direct File program for free tax filing, AP sources say“):
The Trump administration plans to eliminate the IRS’ 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 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.”
But David Williams, president of the Taxpayers Protection Alliance, which describes itself as a nonpartisan organization that disseminates research and analysis on the government’s effects on the economy, said Direct File was “problematic” from day 1, citing the program’s costs and noting that many people who started the process never finished. According to the IRS 423,450 taxpayers logged into Direct File and 140,803 submitted accepted returns in 2024.
“From hidden costs to taxpayer confusion, the program is riddled with issues,” Williams said.
An original architect of the Direct File program told The Associated Press in a statement that “this is sad news for taxpayers and the IRS.” “Direct File was a wildly successful government startup, people who used the tool loved it because it was simple, saved time and cost them nothing.”
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 spent 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.
Derrick Plummer, a spokesman for the commercial tax preparation company Intuit,, said in a statement that “Direct File is and has been a solution in search of a problem, a drain on critical IRS resources and a waste of taxpayer dollars.”
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.
Amanda Renteria, CEO of Code for America, which worked with the IRS to create a state tax filing integration program for Direct File, said the decision was “a betrayal of public trust at precisely the time government should be demonstrating its ability to deliver basic services effectively.”
Sen. Elizabeth Warren, D-Mass., a proponent of building out Direct File, said in a statement 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.”
This is a befuddling move viewed through a political lens. The optics of killing a program that makes it free and easy for ordinary citizens to file their taxes are terrible. To the extent the program, still in its infancy, was glitchy it was surely fixable.
Viewed through the lens of what’s good for donors and lobbyists, of course, this makes much more sense. A complicated tax system—especially one with criminal and civil liabilities for making mistakes—makes ordinary people fearful.
More than 50 years ago, my parents went to H&R Block every year even though their tax situation couldn’t have been more simple: a single wage earner drawing a check from the Army and, sporadically, a mortgage on a single home. When I was single, I used TurboTax or the like for years. And I’ve paid a CPA to do my taxes for twenty years now.
The main problem, of course, is the tax code itself. It’s simply impossible for ordinary folks to navigate with any assurance that they’re doing it right.
In recent years, the move to ever-larger standard deductions and removal and concomitant caps or outright elimination of other deductions has made it likely that most folks can just take the standard deduction. But, unless one calculates it both ways, there’s no real way to know whether you’re leaving money on the table that way.
Regardless, most household filers should be able to file quickly and for free. The presence of a massive rent-seeking apparatus on top of a tax system is a gross distortion of the system.
Every year during tax time, my Dad (an accountant) would commandeer the dining room table for the weekend and do his taxes. He let me help (by adding long columns of numbers,etc.). It was all paper then, of course, and probably simpler. I found I enjoyed it both for the number puzzle and time with Dad. I’ve always done my taxes myself. I still have a copy of every tax return since 1969 when I had my first taxable job at 16. It has been more complex since then but simpler to do with Turbo Tax. Still have to use TurboTax Deluxe because my wife has some self employment income. Still enjoy the intellectual exercise. I know. That’s just sick and demented.
System working as designed.
At some point the American people will learn that this country is set up to benefit the billionaires, and the rest of us are all here to serve them.
Free tax filing probably polls in the high 80% range, right around the level of support for Universal Health Care, food bank support, helping homeless folks, and perhaps even a modicum of gun control.
But we can’t have those things – the government is NOT responsive to the people – because the corporate oligarchy won’t profit sufficiently.
I am pleased that AOC and Bernie are touring the country making this point. Hopefully it sticks.
FYI: It’s “Cui bono?”
Once again, the people who complain the loudest about debt/deficit throw a roadblock into a revenue stream by making it harder (more costly) for the average American to file a return. Same goal but different tack when thousands of IRS employees were fired (for no reason) in the midst of the busiest time of the year. And the notion that Musk would fix Direct File? Puh-lease. DOGE’s mission is to break things and gather data for the Ketamine Kid.
I have little doubt that a very high percentage of Americans will reflexively think of this as a good thing, since it’s a smack against the IRS. The same people who cheer the reduction of government staff and then complain that they can’t get anyone to talk to when they need to.
@Assad K: Pretty much this.
For example, if all you have is one W2, you can file for free with TurboTax, et al. But if you have even one 1099, you have to pay a fee (this happened to one of sons).
@Steven L. Taylor: And who the hell doesn’t have a 1099? Even an interest bearing checking account will generate one.
OTOH a complicated tax system gives rich people myriad ways to escape paying their fair share.
@James Joyner: Hey, you are supposed to be out of touch. Put down that phone! We don’t want to hear from you until Monday!
There’s no goddamn reason for any of this.
Two years ago, I got a letter from the IRS saying that I owed an extra $1500 on my 2021 taxes. I couldn’t for the life of me figure out why. I’d filed with TurboTax, and then six months after filing, I got an email from them saying that due to a software error, I needed to file an amended state return. So I did that, and since I’d file an amended state return, I had to file an amended federal return. But nothing had changed, in terms of how much I owed. But the IRS said I owed them money.
I spent several hours on the phone over the course of a year with IRS folks, and they were, uniformly helpful, polite, and empathetic. The first two people couldn’t figure out why I owed money either, and so deferred everything for three months each time so whatever the problem was could be fixed on their end. And the third woman spent an hour doing some sort of magic on her end, figured out that the resubmission had somehow classified some of my income incorrectly, which was leading to the extra money due.
None of this was their fault, and I have the utmost respect for IRS employees. They’re doing a thankless, impossible job, and Republicans do everything they can to make their jobs harder. And my having to file taxes at all is absurd; the government knows all my income, gains/losses, and so on. The only reason tax season is hard for the vast majority of us is because Republicans and Intuit want it to be. If we lived in a sane society, the only people who needed to worry about tax audits would be those who make the vast majority of their income outside the system the rest of us do, ie, the very rich. And they’d have their accounts gone over with a microscope.
Anyway, this is my way of saying thank you to those folks at the IRS who helped me, and I’m sorry. You don’t deserve what you’re living through right now. And fuck you to Elon and Trump, who are making a lot of people’s lives worse for no goddamn reason, outside of enriching themselves and their friends.
@Kevin:..the government knows all my income, gains/losses, and so on.
When I traveled across the fruited plain covering 14 states over 35 years I paid “Employee Business Expense” motel, meals and the cost of the use of my personal truck on the job, out of my pocket. The IRS could not know these amounts until I provided them when I filed my taxes and received an adjustment on my taxable income.
I do remember one time in the ’80s I got a letter from the IRS stating that I had not reported some taxable income when I filed in an earlier year. The word audit did not appear in the letter.
I knew this was incorrect. I keep my tax records forever. I found the amount on my copy of the appropriate form. Made another copy, circled it in red ink and sent it along with a copy of the letter that the IRS sent me. Certified mail. Return receipt requested.
The only thing I ever got back was the return receipt. No other acknowledgement of any kind.
“cui” not “qui”
Third declension, etc.
I just paid $273 to file with Intuit.
They gave $1M to the Trump inauguration fund, which is just a giant slush fund.
https://campaignlegal.org/update/impact-big-money-and-secret-spending-trumps-second-inauguration
Is it any wonder Trump wants free filing to end?
@Kevin:
@Mister Bluster:
Mexico switched to electronic (aka digital) bookkeeping like ten or so years ago. This means in large part that invoices for expenses and purchases are registered with the Revenue Administration System when they are issued. This records the seller, buyer, amount paid, taxes charged or withheld (like VAT), as well as the fiscal purpose of the expense.
The last is rather complicated and I don’t really understand it. But the stated purpose, chosen form a limited list, determines whether something is deductible or not for a specific tax regime (another complication). For example, if the invoice for my insurance reads “general expenses” or “medical or disability expenses,” the free filing system marks it deductible. If it had been issued under “no fiscal effects,” it wouldn’t be.
Same goes for interests generated by holding government bonds, or from retirement accounts (tax free until tapped anyway).
So, yes, the government has your income and deductible expenses and builds your return automatically (the functionality of the website near the deadline for filing is a different matter).
I should note until last year I wasn’t required to file a return, due to limits set for salaried employees. The limits were lowered for this year, and I should have paid more attention when I heard about it…
Every single action by this administration can be summarized as destroy, revenge and rents seeking. Getting rid of free tax filing is an example of this. Can anyone name anything constructive that Trump has done?
@Mister Bluster: Right, I’m not saying there’s nothing to be done by the person, but there’s no reason the IRS couldn’t just send me a pre-filled out form, ask if I agree, and then let me go from there. Because that’s what happens anyway.
They have a view of what my taxes should be, they compare that to what I submit, and then, if there’s a difference, they ask me to explain the difference. There’s no reason they can’t go first. Except that some people prefer to make taxes more painful for people, because it benefits them to make interactions with the government difficult.
I just spoke with some old friend who said when they tried to file with TurboTax (online) it returned an error code. They had to scramble and print and mail it. Unfortunately, they forgot to sign it. I think this will all get sorted out eventually. But I tied the error to the machinations of DOGE.
I’m really surprised there isn’t an open-source tax preparation solution. If I had the kind of money to be able to start something like that, I would. I hate the tax prep industry and their ability to rent seek.
@Mister Bluster:
Which is why people who had such expenses filed amendments to their tax returns instead of pressing the “accept statement as filed” button at the tax office website. It’s possible to have both.
@just nutha: Should be a reference to Korea in the above statement of mine. It was there originally but revised out and never replaced. Sorry. 🙁
@Daryl: I only paid $170-something, including state tax filing. I guess I must have accepted fewer up charged services than you did.
@just nutha:..taxes, taxes, taxes…
The last time I filed Form 2106 was in the late ’90s. There may have been electronic filing at the time however I always filed on paper forms in those days. No buttons to push.
@just nutha:
Or you had fewer required forms.
Or didn’t file state forms?
@Daryl:
After going out for a short hike and fuming over this some more…can anyone seriously look at this and not see the quid pro quo?
Screw the little guy to line Trump’s pocket.
@Daryl: It could certainly be that I had fewer forms to submit but my accounting of the copy they sent me looked to be ~7 or 8 pages long. My state return was short, tho because I am low enough income to take standard deduction–which I do on both returns. Either way, it was still more than I’d paid the accountant before I moved. If I wasn’t still getting income/dividend reports into early March, I think I’d have a real human do it, but my last real human filed for an extension and didn’t manage to file until July. 🙁
ETA: I certainly think there’s a quid pro quo there, but it would be hard to prove–the Supremes would certainly declare it “just a coincidence.” But I doubt that Trump even factors in screwing the little guy. That part probably IS coincidental.
Let’s see:
– Late-stage capitalist GOP donors make money.
– Republican pols get donations.
– State capacity is reduced.
– Many voters are irritated and GOPs can blame it on “elites” and the “deep state”, i.e. Demoncrats.
– The victims are mostly lower income, disproportionally minority.
– Resulting fees and penalties are regressive revenue.
– Said irritation, fees, and penalties can be readily increased by cutting staff at IRS and mucking up their software.
What’s for a Republican not to like?
I find this beyond astonishing. I’ve filed my tax return online, direct to the Australian Tax Office, for 20 years. The process couldn’t be more straightforward; personal details are pre-filled from the previous year, as is a lot of other information such as income reported to the ATO, tax withheld by the payer, health insurance, any rebates applicable and so on. I cannot comprehend how the US, 20 years later, is abandoning the attempt to introduce a similar system.
@Ken_L:
Because. It. Doesn’t. Make. The. Big. Donors. Any. More. Money.
One year in the early ’80s after several years of filing my own tax returns including
w-2s, 1099, 2106 federal return and state return, I thought I’d try H&R Blockhead just to see if the time it saved me was worth whatever they charged. I ended up having to tell them what a 2106 form was used for. It took extra time to get my return back from them and ready to file. I have done my own taxes ever since.
@Andy:
The IRS has been trying for years to implement such a thing, working up from the simplest returns to more complicated. Congress has been fighting them every step of the way. You can probably guess why.
@DrDaveT: By open source, he means like Linux, or Apache, or … choose your poison. Developed by a bunch of people for free, on the own time. But I can understand why there isn’t.
First, these days, most of the major open source development these days is funded by companies, or by foundations supported by companies, who benefit from having a common platform to run on. Building an OS is a pain in the butt, so instead of 20 companies having 20 flavors of unix, why not have one common linux, and then sell the database on top, or whatever? So there has to be some commercial reason, typically, and there’s no company that would benefit from having open source tax software.
And, second, this is the sort of grinding, incredibly unforgiving, unthankful job that no one really wants. Tax law is complicated, there’s all sorts of fiddly exceptions, and as a developer, you’d be signing yourself up to be yelled at by everyone, and probably sued by some people, too. Why do that to yourself? I’ve known people who were the lone developers of free software that the modern world depends on, and no one knew their name, nor supported them in any way, until there was a security flaw, and then everyone yelled at them. Nobody needs that.
@Kevin:
Yabbut… can’t happen. The tax code changes (literally) every year. Only the IRS knows everything about this year’s rules, until the last minute. H&R Block and Intuit and Jackson Hewitt have to do their own research to figure out how to calculate taxes under the new rules, but they do have privileged status for purposes of electronic filing. It’s hard to see how a Linux-like open source project could get through the vetting process for that.
As with many things in the US, income tax return difficulty and cost varies by state. If state and local tax returns did not exist, then tax season would be much simpler, and the self-filer tax software companies would have to restructure their fees to make up for high priced extra state returns and state e-files on the back end. But most states do have income tax, and most have their own free online filing tools.
Our tax preparation cost was $32 this year. That was the price of H&R Block Deluxe software when it was half off in January. I skipped the added cost of e-filing our home state return through H&R Block. That meant entering data a second time into the state’s free online system. But the state filing systems have always been relatively easy to use–in the current online form, in the form of previous online tools, and the telefile system (dating to the 90’s) that used touch-tone phone data entry.