Trump Administration Plans to End IRS Direct File Program for Free Tax Filing, Amid Criticism from Sen. Warren and Involvement of Elon Musk

The Trump administration plans to eliminate the IRS's 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, which was developed during Joe Biden's presidency, allowed taxpayers to file returns without incurring costs typically associated with commercial tax preparation services. The decision to end the program comes after IRS staff were instructed in mid-March to cease work on its development for the 2026 tax filing season. This move follows Elon Musk's earlier decision to 'delete' 18F, a government agency involved in technology projects like Direct File, and there was some hope that Musk's DOGE team could improve the program. However, the program's future became clear when development was halted. The Direct File program was rolled out as a pilot in 2024 following funding from the Inflation Reduction Act signed by Biden in 2022. Last tax season, it was available in 12 states and accepted 140,803 returns, expanding to half the country this year. The average American spends about $140 on tax preparation annually, and the program faced opposition from Republican lawmakers and commercial tax preparation companies who argued it was redundant due to existing free filing options, despite these being less user-friendly. Sen. Elizabeth Warren, a proponent of the Direct File program, has accused President Trump and Elon Musk of targeting the program because it undermines the profits of major tax preparation firms.