IRS Notifies States There Will Be No Direct File Program For 2026

from the fin dept

We knew this was coming, but it doesn’t make it any less stupid. The road to the IRS’ Direct File program was long and hard-fought. We here at Techdirt have been talking about, and advocating for, something like the Direct File program for at least 15 years. The concept behind the program is a simple one. For a class of citizens with very simple income and tax payments, the IRS already has all the information it needs to process a tax return. In those cases, the IRS can simply mail the information it has to a taxpayer, ask them to sign off verifying the information is complete and accurate, and then process the return. The problem with this is that it cuts out the tax-prep industry that absolutely adores preying on these very same people to milk them for tax-prep services they don’t actually need.

For decades, the industry did exactly that. Even as the government partnered with private tax preparation companies like Intuit to provide federally backed “free” tax-prep websites and platforms, those same companies did everything they could to hide those free services and, in lieu of that, try to sell add-on services to those who were supposed to be able to file for free. While this eventually led to massive FTC fines for Intuit, this was the Faustian bargain that came from years and years of lobbying: The government would work with private industry for free filing programs in exchange for those same companies getting the government to line vulnerable citizens up like cattle headed to slaughter.

The IRS’ Direct File program came directly in the aftermath of the shady shit companies like Intuit did. It piloted in 2023, was a resounding success, and went live in 12 states in 2024. In April of this year, reports of Trump’s plans to end the program filtered into the news, even as the reviews by users of Direct File were overwhelmingly positive. Then, in August, IRS Commissioner Billy Long, himself a tax-prep industry player, said the program would be gone.

And, if you were holding onto any hope that this administration would keep a program in place that citizens love and ultimately reduces the overhead on the IRS, consider your hopes dashed. The IRS has begun notifying the states that had Direct File programs that the program will not be available for 2026 tax filings.

In an email sent from the IRS to 25 states, the tax agency thanked them for collaborating and noted that “no launch date has been set for the future.”

“IRS Direct File will not be available in Filing Season 2026,” says the Monday email, obtained by Nextgov/FCW and confirmed by multiple sources. It follows reports that the program was ending and Trump’s former tax chief, Billy Long, remarking over the summer that the service was “gone.”

Instead, that whole big beautiful bill we have heard so much about contained directions for the IRS to once again partner with private industry in a Free File program. The exact situation we were in that led to so much outrage at the behavior of those private companies, which in turn led to the creation of Direct File to begin with. This is simply winding the clock backwards to something people hated and calling it “progress.”

“It’s not surprising since the Trump administration sabotaged Direct File all through this year’s filing season, at the urging of tax prep monopolies like TurboTax,” Adam Ruben, the vice president of the Economic Security Project, told Nextgov/FCW. “Trump’s billionaire friends get favors while honest hardworking Americans will pay more to file their taxes.”

This isn’t something that can even be argued, honestly. It’s exactly what is happening. And, frankly, actions like this put the lie to Donald Trump’s claim to be fighting for the “little guy”. It’s all a bullshit grift, you see, with middlemen who are as wealthy as they are needlessly having Americans queued up to be conned.

This was a good program. The people who used it liked it. No serious negative consequence was experienced in its use.

And Trump did away with it so that mega-corporations like Intuit can continue skimming money from citizens in order to tell the IRS what it already knows.

Filed Under: convenience, direct file, fuck you taxpayers, irs, taxes

Companies: intuit