IRS free Direct File expands to 25 states — but still faces scrutiny

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

IRS free Direct File expands to 25 states — but still faces scrutiny

Hirurg | E+ | Getty Images

With the start of tax season approaching, Democratic and Republican lawmakers are split on the future of Direct File, the IRS’ free tax filing program.

Direct File, which recently expanded to limited taxpayers in 25 states, processed roughly 140,000 returns in 2024 during the pilot that launched mid-season. The pilot covered simple returns in 12 states.

The program has been controversial among Republicans, who have

This is the hidden content, please

• Sign In
• or
• Sign Up

the free filing service. The critique has raised questions about Direct File’s future, particularly under GOP control of the White House, Senate and the House of Representatives. 

More from Personal Finance:
Here’s how the child tax credit could change in 2025
Year-end bonuses rise — but fewer workers are getting them, report finds
Now is an ideal time to do a financial reset, advisor says. Here’s why

During his Senate confirmation hearing on Thursday, Scott Bessent, President-elect Donald Trump’s pick for Treasury secretary, was asked about the future of Direct File.

If confirmed, “I will commit that for this tax season that Direct File will be operative,” said Bessent, without commenting on future years.

Bessent’s comments come one day after more than 130 Democrats, led by Sens. Elizabeth Warren, D-Mass., and Chris Coons, D-Del.,

This is the hidden content, please

• Sign In
• or
• Sign Up

.

“Direct File is making the process of interacting with the government more efficient, a goal we all can agree on,” the Democratic lawmakers wrote in a letter to Bessent and Billy Long, Trump’s pick for IRS commissioner.

The pilot program saved consumers an estimated $5.6 million in federal tax preparation fees and could

This is the hidden content, please

• Sign In
• or
• Sign Up

in the future, the Democratic lawmakers wrote. “We disagree with our colleagues who are calling on the President to pull the plug.”

This is the hidden content, please

• Sign In
• or
• Sign Up

Rep. Adrian Smith, R-Ne., along with 27 House Republicans in December

This is the hidden content, please

• Sign In
• or
• Sign Up

, urging the president-elect to end Direct File via a day-one executive order.

“The program’s creation and ongoing expansion pose a threat to taxpayers’ freedom from government overreach, and its rollout and structural flaws have already come at a steep price,” the Republican lawmakers wrote. 

While the program launched mid-season in 12 states last year for only simple returns, Republicans have 

This is the hidden content, please

• Sign In
• or
• Sign Up

 to the roughly 140,000 returns filed compared to total eligible filers.

The cost for Direct File through the pilot was

This is the hidden content, please

• Sign In
• or
• Sign Up

, the IRS reported in May 2024. Direct File operational costs were an extra $2.4 million, according to the agency.

Over the past year, Republican lawmakers from both chambers have

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up

to halt the IRS’ free filing program. In January 2024, attorneys general from 13 states described Direct File as “unnecessary and unconstitutional” in a

This is the hidden content, please

• Sign In
• or
• Sign Up

.

This is the hidden content, please

• Sign In
• or
• Sign Up

#IRS #free #Direct #File #expands #states #faces #scrutiny

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up