The IRS Direct File program — a first-of-its-kind system allowing Americans to file their federal taxes directly with the agency, for free — is on the chopping block.

According to sources familiar with the decision, the Trump administration plans to scrap the service, halting what had been hailed by some as a transformative step toward simpler, no-cost tax filing. 

An Experiment in Easy Filing

Launched as a pilot in early 2024, the IRS Direct File program was available to select users in 12 states. It allowed eligible taxpayers with straightforward returns — mainly W-2 earners — to bypass third-party software and file directly with the federal government, entirely online and entirely free.

The tool had been praised by public interest groups and lawmakers who have long called for more equitable tax filing options. For many who used it, the program worked — it was simple, intuitive, and didn’t try to upsell users or hide costs behind fine print.

More than 140,000 taxpayers reportedly used the pilot service this season.

Trump Admin Pulls the Plug

Despite positive early feedback, President Donald Trump’s administration has made the decision to end the program, sources close to the matter confirmed. Though no formal announcement has been made, the move is expected to be finalized in the coming weeks.

While the White House has yet to publicly justify the cancellation, the move lines up with longstanding opposition from tax preparation companies that have spent years lobbying against government-run alternatives. The IRS offering a free, no-frills service poses a direct threat to the private tax prep industry — an industry that profits handsomely from the complexity of the U.S. tax code.

The Trump administration’s critics are already crying foul, claiming the decision prioritizes corporate interests over taxpayer convenience.

“Free to File” — But Not for Long?

Democratic lawmakers and consumer advocates have urged the administration to reconsider. “This is about giving Americans a fair and free way to file their taxes — not letting corporate lobbyists dictate federal policy,” said one congressional aide who requested anonymity.

For now, the IRS has remained silent on the future of the program. A formal statement is expected once the administration finalizes its decision.

What This Means for Taxpayers

If the Direct File system is shut down, taxpayers in future years will be left with the usual set of options: use private software, hire a preparer, or navigate the complex forms on their own — none of which guarantee a free or painless experience.

For those who saw Direct File as a long-overdue modernization of the tax system, this could mark a disappointing turn backward.

The pilot showed what was possible. But politics may end the experiment before it ever truly begins.