The Trump administration is moving to shut down the IRS’s Direct File program, a free, government-run system that allowed Americans to file their taxes directly with the IRS online, according to two individuals familiar with the decision.
Originally launched under President Biden, Direct File was widely praised by users for its simplicity, speed, and ability to save money. However, Republican lawmakers and major tax preparation companies pushed back, arguing the program was duplicative and an unnecessary use of federal funds, even though many of the existing “free” alternatives were difficult to navigate or carried hidden costs.
Since Trump returned to office, the program’s future had been uncertain, particularly as Elon Musk’s Department of Government Efficiency (DOGE) aggressively downsized federal agencies and tech programs. In February, Musk posted on X that he had “deleted” 18F, a tech unit within the federal government that helped develop projects like Direct File.
There had been speculation that Musk’s tech team might adopt and overhaul the program, but hopes faded when IRS employees working on Direct File were instructed in mid-March to halt development for the upcoming 2026 tax filing season. That decision effectively signaled the program’s demise.
The two sources who confirmed the decision spoke anonymously, as they were not authorized to discuss it publicly.
Adam Ruben of the Economic Security Project criticized the move, calling it an example of the administration disregarding the interests of ordinary taxpayers. “The fix was in from the beginning,” he said. “Cutting costs and saving money for families were just empty campaign promises.”
Direct File had been introduced as a pilot in 2024 after the IRS was tasked with developing a no-cost filing option through funding from the Inflation Reduction Act, signed into law by Biden in 2022. Tens of millions of dollars were invested into its rollout.
By May of last year, the IRS had announced plans to make Direct File a permanent option. But backlash from commercial tax prep giants, which profit handsomely from charging individuals to file returns, intensified. These companies lobbied heavily against the system, arguing it threatened their business model. On average, Americans pay around $140 annually to prepare and file taxes.
Last year, 140,803 tax returns were submitted through Direct File in the 12 states where it was offered. The program was significantly expanded for this year’s filing season, potentially reaching half the U.S. population. However, the exact number of users this year remains unknown.
With its termination, the administration is expected to face renewed criticism from consumer advocates who argue that eliminating Direct File only benefits corporations, while working families lose a free and user-friendly way to fulfill their tax obligations.