The IRS free tax-filing program Direct File saved users $160 each. Now it may come to an end.

The IRS had started a new Direct File facility to help taxpayers, free of charge. This initiative was started during US President Joe Biden’s term and aimed to save costs, make tax filing simpler, and bring about transparency in the process. The Economic Security Project estimates that the program saves an average of $160 for taxpayers in filing fees and time alike.

ALSO READ: IRS Sending Average $3,129 Payments via Direct Deposit from April 22 to April 30

Why is the Trump administration putting an end to it?

And now, news indicates that Donald Trump’s administration would terminate the program. The Associated Press has reported that the scheme may soon come to an end. Mainly because, opposed by private corporations in tax preparations such as TurboTax (Fairy companies: Intuit) and H&R Block, they claim this is a waste of IRS resources and a misappropriation of taxpayer money.

A lot of money goes into tax filing

Do you know that every year, over $100 billion is spent by Americans on tax filing? Direct File was brought in to allow people to avoid these huge fees and easily file their taxes online. But since the plan ruined the chances for big money for some private companies, they began opposing it.

Was Direct File a success?

Direct File began piloting in 12 states in 2024 and it was used by about 141,000 people. In 2025, it was extended to 25 states, but data for 2025 has not been released.

Although the IRS states that over 400,000 users logged in, out of, only 140,000 completed their filing. Meaning, a good number of people start but do not finish.

Supporters Despite Opposition

Many consumer organizations and tax experts lauded Direct File. According to a survey, 96% of respondents were at least “satisfied” or “very satisfied” with their experience using the service.

Over 170 Democratic and independent lawmakers signed a letter to the Treasury Secretary and Acting Commissioner of the IRS in 2025 that demanded the continuation of Direct File. The letter stated:

“It would be a slap in the face of the taxpayers to discontinue this free and easy service.”

Allegations of the Opposition and Plans of the Administration

But the opposition was mounted by Republican leaders. According to them, this scheme infringes on taxpayers’ freedom and stands as evidence of gross intervention by the government. Congressman Adrian Smith, a Republican from Nebraska, told Trump that this scheme should immediately be stopped by 2025.

The Trump administration is likely to lay off up to 40 %of IRS staff, up to 20,000 employees.

What lies ahead?

The Treasury has yet to make a final decision. But they say that Direct File has cost millions of dollars so far and that the program has not been helpful.

Conclusion

The IRS Direct File was a commendable program that helped millions of Americans to file taxes. It upholds time and ease; however, its future is in limbo due to political differences and pressure from some private tax companies. Closing this scheme would be a big setback to the expectations from the government for simple and inexpensive services.

It is not yet clear at all if the scheme will go ahead or not, but supposing you want to benefit from it too, keep a lookout. For updates, coming soon.

FAQs