Latest news with #DirectFile
The Verge
6 days ago
- Business
- The Verge
IRS head says free Direct File tax service is ‘gone'
The Trump administration may have just axed the IRS Direct File program. During a summit earlier this week, IRS Commissioner Billy Long said the free tax filing service is 'gone,' adding that 'big beautiful Billy wiped that out,' as reported earlier by Bloomberg Law. President Donald Trump's Big Beautiful Bill includes a provision to establish a task force dedicated to 'the replacement of Direct File.' The IRS first announced Direct File in 2023, which lets taxpayers submit their tax returns directly to the government for free. It began testing the program in select states during last year's tax season, and planned on expanding it this year. The future of Direct File has remained uncertain for months, with several reports suggesting the Department of Government Efficiency's (DOGE) federal cuts may eliminate it. Now, it seems that may be the case. 'I don't care about Direct File. I care about direct audit,' Long said, according to Bloomberg Law. Many lawmakers are frustrated by the program's potential elimination. 'Direct File was an easy way for Americans to file their taxes for FREE each year,' Senator Elizabeth Warren (D-MA) wrote in a post on X. 'Why in the world did the Trump administration kill it? To give a huge handout to giant tax prep companies like TurboTax that rip Americans off.' In a statement to CNBC, an IRS spokesperson said, 'We look forward to Treasury's forthcoming report to Congress on the Direct File program and on potential public-private partnership alternatives to Direct File, as required by the One Big Beautiful Bill.' The IRS didn't immediately respond to The Verge's request for comment. Posts from this author will be added to your daily email digest and your homepage feed. See All by Emma Roth Posts from this topic will be added to your daily email digest and your homepage feed. See All News
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Miami Herald
6 days ago
- Business
- Miami Herald
Free tax filing program could soon be axed by the IRS. Here's what to know
The Internal Revenue Service is poised to discontinue its Direct File program, which allows millions of Americans to file their taxes for free, drawing criticism from some Democrats. During a tax summit on July 28, IRS Commissioner Billy Long said the cost-free service is 'gone,' according to Bloomberg Tax. 'Big beautiful Billy wiped that out,' he added, referencing the sweeping congressional spending bill signed into law by President Donald Trump on July 4. The bill does not outright end Direct File, but it allocated $15 million to the Treasury Department to establish a task force to review the program and assess other options. An IRS spokesperson confirmed the agency is awaiting the task force's findings, which must be delivered to Congress within 90 days. 'We look forward to Treasury's forthcoming report to Congress on the Direct File program and on potential public-private partnership alternatives to Direct File, as required by the One Big Beautiful Bill,' the spokesperson said in a statement to McClatchy News. 'Long is committed to modernizing the IRS and providing a taxpayer experience that meets today's expectations, which includes giving taxpayers transparency into the status of their tax returns and audits,' the statement said. The Direct File program allows eligible taxpayers in certain states to electronically file their federal tax returns directly on the IRS website at no cost. The agency launched the pilot program in 2024, under then-President Joe Biden, making it available to taxpayers in 13 states. It was later expanded to include 25 states, including California, New York, Florida, Texas, Illinois, North Carolina and Pennsylvania. Residents of these 25 states reporting W-2 wage income, Social Security income, retirement income, and other credits and deductions are able to use the free service. But, taxpayers with business, rental or gig economy income are ineligible. The IRS website has a brief survey, allowing taxpayers to determine whether they are eligible. The Treasury Department said in October that more than 30 million Americans would be eligible to use the service during the 2025 tax season. Many Republicans have expressed criticism of the Direct File program, arguing it poses a number of problems. 'The program's creation and ongoing expansion pose a threat to taxpayers' freedom from government overreach,' a group of 29 House Republicans said in a December letter to Trump. They argued that the IRS faces a conflict of interest in preparing tax returns because it simultaneously acts as the tax collector and enforcer. The agency 'has little incentive to ensure hardworking Americans do not pay more than they owe in taxes and may instead benefit from families and small businesses paying greater amounts than they are required by law,' the letter said. Sen. Mike Crapo, an Idaho Republican, has also said it's unclear whether the program is legal without congressional approval. Democrats, on the other hand, have long defended the pilot program, contending it saves taxpayers time and money. In a January letter to Treasury Secretary Scott Bessent, then a nominee for the role, dozens of Democratic senators and representatives lauded the successes of Direct File. They said it had saved $5.6 million in tax preparation fees in its first year and was on track to save $11 billion per year 'at scale.' Since reports of the IRS' plan to axe the program emerged, several Democrats have expressed their disapproval. 'Direct File was an easy way for Americans to file their taxes for FREE each year,' Sen. Elizabeth Warren, a Massachusetts Democrat, wrote on X. 'It's a no-brainer — and it's popular. So why in the world did the Trump administration kill it?' she added. 'To give a huge handout to giant tax prep companies like TurboTax that rip Americans off.'
CNBC
30-07-2025
- Business
- CNBC
'I don't care about Direct File': IRS chief says agency plans to end free filing program
Internal Revenue Service Commissioner Bill Long said the agency will end its Direct File program after a limited pilot and one full filing season. President Donald Trump's massive spending and policy bill includes funding to research and "replace any direct e-file programs run by the Internal Revenue Service." Already, the program is "gone," Long said at a tax professional summit on July 28, Bloomberg Law reports. "You've heard of Direct File, that's gone," Long said. "Big beautiful Billy wiped that out. I don't care about Direct File. I care about direct audit." The agency has not confirmed the future of the program. "Commissioner Billy Long is committed to modernizing the IRS and providing a taxpayer experience that meets today's expectations, which includes giving taxpayers transparency into the status of their tax returns and audits," an IRS spokesperson told CNBC Make It in an emailed statement. "We look forward to Treasury's forthcoming report to Congress on the Direct File program and on potential public-private partnership alternatives to Direct File, as required by the One Big Beautiful Bill." The Direct File program allowed taxpayers in certain states with simple tax situations to file their taxes for free directly through the IRS. The agency piloted the program in 12 states in 2024 and expanded to an additional 13 states in 2025. An estimated 30 million Americans were eligible to use the filing option in 2025, according to the Treasury Department. Some Republicans have called the program wasteful and an overreach of the federal government. The Trump administration was already planning to end the Direct File program prior to the policy megabill, the Associated Press reported in April. Nearly 300,000 filers used Direct File for the 2025 tax season, and 94% of users who completed an IRS survey rated their experience as "excellent" or "above average," according to an internal IRS report obtained by Nextgov/FCW. Taxpayers who received an extension and as a result haven't yet filed their 2024 taxes are still be able to access Direct File to get their returns in by the Oct. 15 deadline, the IRS confirmed. Even if Direct File is eliminated by next year's tax season, taxpayers may have options to file their taxes for free. The IRS has another free filing program where the agency partners with third-party tax preparation software companies to provide services to taxpayers, although there are varying eligibility requirements, including adjusted gross income and state of residence. You can use the IRS' questionnaire tool to find an applicable partner. Additionally, the IRS sponsors the Volunteer Income Tax Assistance program, which helps taxpayers earning less than $67,000 a year for 2025, who have a disability or who speak limited English get in-person tax preparation assistance for free. You can also DIY your taxes by accessing the IRS' free fillable forms and submitting them directly to the agency.
Newsweek
30-07-2025
- Business
- Newsweek
Map Shows States Where IRS Tax Returns Could Change for 2026
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Options for filing tax returns are likely to change in 2026 for taxpayers in 25 states. IRS Commissioner Billy Long, whom President Donald Trump appointed to head the federal tax agency last month, appeared to confirm that Direct File—which offers free tax filing directly with the IRS—won't be an option for the next filing season. On Monday, at the National Association of Enrolled Agents' tax summit, he said: "You've heard of Direct File. That's gone. Big beautiful Billy wiped that out." Under the One Big Beautiful Bill Act, passed by Congress and signed by the president earlier this month, the Treasury has been directed to form a task force to replace the program, which has been running for only two years. Newsweek has contacted the IRS for comment via email. What Is Direct File? Direct File is a web-based service that allows taxpayers to submit simple returns directly with the government agency free of charge, eliminating the need for a third-party tax preparation service. The IRS launched its Direct File pilot in 12 U.S. states in March 2024, expanding it to 25 states for the 2025 tax season. These are the states: Alaska Arizona California Connecticut Florida Idaho Illinois Kansas Maine Maryland Massachusetts Nevada New Hampshire New Jersey New Mexico New York North Carolina Oregon Pennsylvania South Dakota Tennessee Texas Washington state Wisconsin Wyoming The program, created under the Biden administration, served 141,000 taxpayers across the initial 12 states it was available for in 2024. The Economic Security Project has estimated that the program saved an average of $160 in tax preparation fees for its users. Republicans and private tax preparation companies have derided the program, saying free options already exist for filers and that it is a waste of taxpayer money. Is Direct File Finished? The IRS has not announced that the program is shutting down, but provisions in the One Big Beautiful Bill Act show that the administration is looking for a replacement. Under the legislation, which Trump signed into law on July 4, the Treasury has 90 days from the law's passage to send Congress a report that includes the following: How much it would cost to expand or create public-private partnerships that offer free tax filing for up to 70 percent of taxpayers based on their income. These partnerships would take the place of any IRS-run free filing programs. What taxpayers think about using a free, government-run tax filing system versus one provided by private companies. Whether a new system is possible, how to make all filing options simple and consistent for users, and how to meet different taxpayer needs. The estimated cost of creating and managing a free IRS-run online tax filing system, including options for adjusting the system based on a person's income and how complex their tax return is. Is Direct File Still Open? Direct File remains open through October 15, 2025, for anyone who has yet to file a 2024 tax return. But it is looking unlikely it will be in place for 2026. Given that the administration is looking to replace it, it is also unlikely that it will be expanded to any further states if it remains active for the next tax season. What Other Free Filing Options Are There? The longer-standing Free File program appears to be unaffected. Under that program, companies participating in a public-private partnership with the IRS offer free tax preparation software. IRS Free File offers guided tax software to taxpayers with an adjusted gross income of $84,000 or less. For those who don't qualify, IRS Free File still provides fillable forms that any taxpayer, regardless of income, can use if they prefer to prepare their own return.
Washington Post
18-07-2025
- Business
- Washington Post
Activists try to preserve IRS's Direct File now that Trump has ended it
The Trump administration has shut down the IRS's two-year-old experiment in free streamlined tax filing, but the people behind Direct File don't want to let it go quietly. The massive tax-and-spending law that President Donald Trump signed on July 4 included funds to study a replacement for the IRS-built website that the Republican administration had already begun to dismantle. Yet the idea of keeping the public filing option alive in some form has brought together a collection of activists and computer programmers including former IRS employees, nonprofit advocates and even an 18-year-old dishwasher in Arizona who wants to create his own tax filing website despite having never filed a return for himself.
