A group of nearly 30 House Republicans on Tuesday urged Donald Trump to get rid of the IRS’ free program to file federal taxes—a move that would make it more expensive for millions of Americans to file their taxes.
Direct File is a product of the Inflation Reduction Act, which provided money for the IRS to create a free alternative to TurboTax and other for-profit tax-preparation companies.
The program especially benefits low-income Americans who cannot afford tax preparers. And it poses a threat to tax-preparation companies, who stand to lose revenue if the IRS has its own program for Americans to use to prepare and file their annual returns.
In the letter, Republicans tried to make Direct File sound bad but actually made the program look pretty appealing.
“As you know, during the last tax year, the IRS rolled out its Direct File pilot program in 12 states, through which taxpayers file their taxes directly to the IRS instead of through a trusted accountant or reputable third-party preparation service,” the GOP lawmakers wrote in a letter to Trump, telling him he should get rid of Direct File on “day one” of his presidency.
“Under the guise of offering a convenient ‘free-to-file’ alternative preparation service, the IRS asserts itself as the tax assessor, collector, preparer, and enforcer—all in one—when the program is used,” they continued.
In fact, Trump’s own co-president, billionaire Elon Musk, thinks an easy-to-use and free service from the federal government to file taxes is a good idea. In fact, he’s proposed a similar-sounding government-run mobile app for Americans to prepare their taxes.
It’s unclear why the Republican lawmakers think people should trust a third-party over the IRS to properly file their taxes. But campaign contributions from the tax-preparation companies—which have worked to block programs like Direct File for years—shed some light.
Many of the Republicans urging Trump to get rid of Direct File have received campaign contributions from Intuit, the company that owns TurboTax. Intuit earned $14.4 billion in revenue in fiscal year 2023.
Young Kim, Nicole Malliotakis and Andrew Garbarino, all signers of this, are among the top House recipients of donations from the accounting industry per OpenSecrets https://t.co/eu7ZI4yYYH pic.twitter.com/f6OeZw9IIP— Jacqueline Sweet (@JSweetLI) December 11, 2024
The GOP lawmakers who oppose Direct File instead support “Free File.” According to a 2019 ProPublica exposé on TurboTax, Free File was an agreement TurboTax and other tax-preparation companies made with the federal government in which the companies agreed to provide a free service for some low-income Americans in exchange for the federal government agreeing not to create their own tax-preparation software.
From ProPublica’s report:
Since Free File’s launch, Intuit has done everything it could to limit the program’s reach while making sure the government stuck to its end of the deal. As ProPublica has reported, Intuit added code to the Free File landing page of TurboTax that hid it from search engines like Google, making it harder for would-be users to find.
While Republicans are railing against the Direct File program, studies show it is popular with Americans.
In 2024, the new Direct File service was in a pilot phase, processing more than 140,000 tax returns. But 90% of people who used it rated the software as excellent or above average, with respondents saying they liked that the software was easy to use, trustworthy, and free.
A survey from David Binder Research for the Economic Security Project, a left-leaning nonprofit focused on economic issues, also found that people preferred Direct File over paid preparers and other paid software.
“Overall, those using Direct File in the pilot states report very high satisfaction with the service and very high likelihood to recommend it to others,” the survey found. “Compared to those using alternatives, Direct Filers are much more likely to say tax filing this year was more straightforward than last year and that their costs and time spent filing were reduced.”
In 2025, Direct File will be expanded to 24 states for people who do not itemize their taxes and do not collect gig-economy, rental, or business income.
But its fate from there is unclear. In January, Republicans will have a trifecta in Washington and have been working to kill the program since its inception. In fact, Trump’s pick to be the new IRS commissioner wants to get rid of the IRS altogether.
Ultimately, killing Direct File is just another way Republicans are sticking up for big business over average Americans, and goes against the economic populism Americans voted for in 2024.
“Direct File is a free service that makes it easier to file your taxes every year. Republicans want to make your lives more difficult,” Democratic Rep. Gerry Connolly of Virginia wrote in a post on X, responding to the Republican’s letter.
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