In Washington, Mia Francis, a 22-year-old barista from Boston, embarked on a new journey this tax season by filing her taxes independently for the first time using a government-provided free tax filing program. The program, known as IRS Direct File, enabled her to complete her tax returns in just 45 minutes. This digital tax filing system, having been made a permanent fixture last year, is now accessible in 25 states.
Francis anticipates a $530 refund, which she plans to allocate towards a trip to Amsterdam. By utilizing Direct File, she avoided the costs associated with commercial tax preparation services, ensuring that her refund stretches further.
Despite the program’s ease and popularity, its future is uncertain. The IRS Direct File’s availability continues as the April 15 tax filing deadline approaches, with Treasury Secretary Scott Bessent committing to its maintenance for this tax season. However, Elon Musk and the Department of Government Efficiency are scrutinizing federal programs, throwing Direct File’s future into question.
Currently, the IRS and the Department of Government Efficiency have not disclosed their plans for Direct File despite requests for comments. Nevertheless, some Republican tax experts argue that the IRS launched Direct File without congressional authorization. Republican lawmakers and commercial tax preparation companies argue that the program is redundant given existing free filing options, albeit ones that are difficult to navigate.
Originally introduced as a pilot program in 2024 as part of the Inflation Reduction Act, Direct File aims to simplify tax submissions. Last year, it processed 140,803 returns in the 12 states where it was piloted. This year, its reach has expanded, covering half of the country. However, the exact number of users this tax season remains unclear.
Merici Vinton, from the U.S. Digital Service and one of Direct File’s original creators, praised its simplicity and efficiency. She characterized it as a model example of modern governmental interactions. Investing in Direct File, she argued, could benefit both taxpayers and the IRS by enhancing user experience based on real-time feedback.
Speculation arose after Musk’s claim of deleting 18F, an agency associated with technology projects like Direct File, sparking confusion about Direct File’s status. Yet conversations within the IRS reveal no final decision on its future has been made, according to sources familiar with these discussions.
Former IRS Commissioner Daniel Werfel, who guided the program’s rollout, emphasized considering taxpayer preferences when deciding Direct File’s fate. He noted that while Direct File provides a valuable option, it should not replace other filing methods, as taxpayers have varying needs.
Opponents, like Derrick Plummer of Intuit, argue that Direct File is unnecessary, claiming it misallocates taxpayer funds and strains IRS resources. Additionally, a Treasury Inspector General report from June 2024 estimates the program could cost $64 million to $249 million annually.
While critics advocate for the IRS to focus on privacy and customer service, others like Aquiel Warner, from Austin, Texas, prefer avoiding commercial tax services. Warner appreciates the convenience of filing her taxes with Direct File using her phone and a chatbot and values the program’s cost-free nature. Despite privacy concerns, she feels more secure using the IRS than commercial alternatives.
Grover Norquist, head of Americans for Tax Reform, contends that the IRS lacked congressional approval for Direct File, labeling its development unauthorized. He has called for congressional and Justice Department inquiries into the program’s funding.
On the other hand, Democratic lawmakers have advocated for the program’s continuation, stressing in a letter to Scott Bessent the detrimental effects of terminating Direct File on everyday Americans. The program’s permanent status hangs in the balance as Billy Long, the nominee for IRS commissioner, anticipates a hearing.
Amidst uncertainty, the potential for Musk and his tech team to modify or dismantle Direct File looms. However, Werfel and Francis remain hopeful for its continuation, recognizing the importance of diverse tax filing options for the nation’s varied taxpayers.
For young taxpayers like Francis, Direct File represents a crucial simplification in tax filing, offering a faster, easier solution for those navigating the process for the first time.
