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IRS’s free electronic tax filing program could get cut despite its success after Elon Musk says DOGE ‘deleted’ government tech group that created it

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The Associated Press
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The Associated Press
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March 13, 2025, 5:30 AM ET
Treasury Secretary Scott Bessent committed during his January confirmation hearing to maintaining IRS Direct File—at least for this tax season.
Treasury Secretary Scott Bessent committed during his January confirmation hearing to maintaining IRS Direct File—at least for this tax season.Patrick Semansky—AP
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Mia Francis, a 22-year-old barista from Boston, filed her taxes on her own this year for the first time, using a free government tax filing program that made it easy because it did most of the work for her.

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Francis said it took 45 minutes to finish her taxes with the IRS Direct File program, an electronic tax return filing system that the IRS made permanent last year and that has rolled out to 25 states.

Francis is expecting a $530 refund. And because she saved cash by not using a commercial tax preparation company to file her taxes, “that money will go a long way,” she said. She plans to use it for a trip to Amsterdam this year.

Despite its popularity with Francis and other members of the American public, the IRS Direct File’s fate remains unclear as Elon Musk and the Department of Government Efficiency cleave their way through the federal bureaucracy. So far, the program is still available for use ahead of the April 15 tax filing deadline, and Treasury Secretary Scott Bessent committed during his January confirmation hearing to maintaining it, at least for this tax season.

Representatives from the Internal Revenue Service and DOGE did not respond to requests for comment from The Associated Press on their plans for Direct File. But one Republican tax expert says the IRS never got congressional authorization to create Direct File. And Republican lawmakers and commercial tax preparation firms complain the program is a waste of money because free filing programs already exist, although they are hard to use.

Direct File was rolled out as a pilot program in 2024 after the IRS was tasked with looking into how to create a “direct file” system as part of the money it received from the Inflation Reduction Act signed into law by President Joe Biden in 2022. Last May, the agency announced that the program would be made permanent.

The IRS accepted 140,803 returns filed by taxpayers using Direct File in the 12 states where it was available last tax season. It’s been expanded to include half the country this year. It is unclear how many taxpayers have used Direct File this year.

Merici Vinton, an original architect of Direct File from the U.S. Digital Service, noted the ease and accessibility of the program and called it “a great example of how people should interact with the government in the 21st century.”

“We effectively launched a startup in the IRS,” she said. “It was built by an in-house product team, in an iterative manner, and we ship updates to the software to improve user experience in real time based on feedback. If we continue to invest in it, both taxpayers and the IRS can benefit.”

Musk posted last month on his social media site that he had “deleted” 18F, a government agency that worked on technology projects such as the IRS’ Direct File program. This led to some confusion about whether Direct File is still available to taxpayers. However, conversations inside the IRS indicate that no decision has been made on whether to cut the program, two people familiar with these conversations tell the AP.

Former IRS Commissioner Daniel Werfel, who oversaw the rollout of the program, said Treasury officials considering the future of the program should take into account “the voice of the taxpayers.”

“My reflection is that taxpayers are in very different situations and have very different preferences for how they want to file,” he said. “Those whose preference is to file electronically direct with the IRS for free, it’s a good option to have on the menu. But it should not replace other options.”

Derrick Plummer, a spokesperson for Intuit, one of the country’s largest commercial tax preparation firms, said free tax preparation had been available for years before Direct File came along.

“IRS Direct File is a solution in search of a problem, a waste of taxpayer dollars and a drain on critical IRS resources,” he said. A June 2024 Treasury Inspector General for Tax Administration report estimates that the annual costs of Direct File may range from $64 million to $249 million.

“The IRS should focus on its core mission including data privacy and customer service while policymakers in Washington focus on simplifying the tax code,” Plummer said.

However, other taxpayers, like 31 year-old Aquiel Warner in Austin, Texas, say they want to avoid using commercial tax preparation software.

Warner filed her taxes with Direct File in 10 minutes using her phone and a chatbot that the IRS provides. She likes the program’s convenience, that it prepopulated her tax forms and that it allowed for free filing. Although she has some concerns about data privacy in the government — DOGE is reported to have access to some of the IRS’ internal systems — she feels more secure going through the IRS than commercial tax preparation services.

“I don’t want to be a product. I don’t want my information sold when I file my taxes,” she said. “I have to file my taxes, and I don’t want to be put in a situation where, in order to file my taxes, I have to pay to get the help I need because I’m not a professional tax preparer.”

Grover Norquist, president of Americans for Tax Reform, said the IRS never got explicit permission from Congress to create the Direct File system.

“It really doesn’t matter if it’s a good idea. It was done illegally,” he said, calling on Congress and the Justice Department to look into what he says is unauthorized spending that went into the creation of Direct File.

Democratic lawmakers in January asked Bessent and IRS commissioner nominee Billy Long to preserve the program. They wrote in a letter that “ending Direct File would hurt everyday Americans.” Long has not yet received a nomination hearing.

In the meantime, Musk and his cadre of computer programmers could decide to wield their tech skills to boost the program — or use the very same digital savvy to delete it.

For his part, Werfel hopes that the agency will keep the program. “It’s a big country with a lot of taxpayers with a lot of different preferences,” he said.

Francis, the Boston barista, hopes so, too.

”There are a lot of young people like me who are working and figuring out how to file their taxes — this just makes it faster and easier,” she said.

The Fortune 500 Innovation Forum will convene Fortune 500 executives, U.S. policy officials, top founders, and thought leaders to help define what’s next for the American economy, Nov. 16-17 in Detroit. Apply here.
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