On Tuesday, a group of about 30 House Republicans urge Donald Trump has decided to eliminate the IRS’s free federal tax filing program. This 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 funding for the IRS to create a free alternative to TurboTax and other for-profit tax preparation companies.
This program is especially helpful to low-income Americans who cannot afford to hire a tax preparer. And that poses a threat to tax preparation companies if the IRS has its own program that Americans can 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 attractive.
“As you know, during this past tax year, the IRS launched a direct filing pilot program in 12 states, which allows taxpayers to file their taxes directly with the IRS rather than through a trusted accountant or reputable third-party preparation service. ” Republican lawmakers wrote: letter Told Trump to get rid of Direct File on “day one” of his presidency.
“Under the guise of providing a convenient ‘free file’ alternative preparation service, the IRS holds itself out as the tax assessor, collector, preparer and enforcer when the program is used,” they continued.
In fact, Trump himself co-chairmanBillionaire Elon Musk thinks an easy-to-use, free service provided by the federal government for filing taxes is a good idea. In fact he proposal A similar mobile app run by the government to help Americans prepare their taxes.
It’s unclear whether Republicans believe people should trust a third party rather than the IRS to file their taxes properly. However, campaign contributions from tax reporting companies For years, efforts have been made to block programs like Direct File.—It’s gotten a little brighter.
Many Republicans are urging Trump to eliminate Direct File. campaign donations It’s a product of Intuit, the company that owns TurboTax. Intuit acquisition $14.4 billion Fiscal Year 2023 Sales.
Republicans who oppose Direct File instead support “Free File.” According to 2019 ProPublica Exposure Free File from TurboTax is an agreement that TurboTax and other tax preparation companies have with the federal government, in which they agree to provide free services to some low-income Americans in exchange for the federal government agreeing not to impose its own taxes. Preparation software.
From ProPublica’s report:
Since Free File launched, Intuit has done everything it can to limit the scope of the program while ensuring the government lives up to its end of the bargain. As ProPublica did reportedIntuit added code to TurboTax’s Free File landing page that hides it from search engines like Google, making it harder for prospective users to find it.
Republicans have criticized the Direct File program, but studies show it is popular with Americans.
In 2024, a new Direct File service was in the pilot phase. 140,000 tax return. but 90% of people Those who used it rated the software as good or above average, and respondents said they liked that it was easy to use, reliable, and free.
no way inspection The David Binder Research for the Economic Security Project, a left-leaning nonprofit focused on economic issues, also found that people prefer Direct File over paid writers and other paid software.
“Overall, people using Direct File in the pilot have reported being very satisfied with the service and very likely to recommend it to others.” inspection establish “Compared to people using alternatives, direct filers are much more likely to say that filing their taxes this year was simpler than last year and that they spent less money and less time filing.”
Direct File in 2025 pervasive to 24 states This is for people who don’t itemize their taxes and don’t collect gig economy, rental or business income.
But its fate there is unclear. In January, Republicans will have a triple whammy in Washington, and they have been working toward it. kill the program Since its founding. In fact, Trump’s choice for the new IRS Commissioner is Get rid of the Internal Revenue Service (IRS) altogether..
Ultimately, getting rid of Direct File is just another way for Republicans to defend big business over ordinary Americans and goes against the economic populism Americans voted for in 2024.
“Direct File is a free service that makes filing your taxes easier each year. Republicans want to make your life harder.” Virginia Democratic Rep. Gerry Connolly wrote A post on X responded to the Republican’s letter.
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