"The industry program, called Free File, didn't end with Direct File, but the IRS had decided to offer its own option, too, after low usage rates were reported with the Free File program. Many Republicans opposed the IRS service, calling it "a threat to taxpayers' freedom from government overreach." Tax prep companies also lobbied against the program, which offered taxpayers with relatively simple tax situations in 25 states a free way to file online, directly with the IRS."
"Democrats, meanwhile, have heralded Direct File as filling in a core responsibility of the government - tax filing - and saving taxpayers money in the process. The average taxpayer spends $150 and 9 hours a year on their taxes, and billions of dollars in benefits delivered through the tax code go unclaimed every year. The IRS is cancelling Direct File because of its cost and low participation rates."
The IRS is cancelling the Direct File government-run free filing option and recommitting to its long-standing partnership with tax-preparation companies through the Free File industry program. Direct File launched in 2024 after low usage of Free File, but the program experienced low participation and incurred costs that the IRS says diverted resources from core priorities. Republicans and tax-prep companies opposed the government service as overreach, while Democrats framed it as a government responsibility that could save taxpayers time and money. The average taxpayer spends $150 and nine hours annually on taxes, and billions in tax benefits go unclaimed. Republicans provided $15 million for the effort in recent legislation.
Read at Nextgov.com
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