The U.S. Department of the Treasury announced Thursday that the Internal Revenue Service’s (IRS) Direct File program, a free, online tax filing program, will become a permanent tool accessible to everyone starting with the 2025 filing season.
According to the statement, the IRS Direct File program will be available for all 50 states and Washington DC. This program was a great success among the few states that were participants in the pilot that was conducted in the 2024 tax season. Making it permanent has a huge impact for American taxpayers, as it eliminates the need to invest large amounts of money in private tax filing services such as, for example, TurboTax.
This measure could represent a serious blow to these companies that bill hundreds of millions of dollars to millions of taxpayers every year in all 50 states and Washington DC.
IRS Provides Free Tax Filing for All States in 2025
According to the Treasury in early May, about 140,000 people participated in the Direct File pilot program in a dozen states and received more than $90 million in refunds. The pilot far exceeded its initial goal of reaching 100,000 participants during last tax season.
Treasury Secretary Janet Yellen highlighted the commitment of President Joe Biden’s administration to saving Americans time and money and ensuring that families receive the tax benefits that are rightfully theirs. Yellen stressed that the idea is to provide a free and accessible tool to all Americans who want to have the option of filing a tax return.
These types of initiatives are crucial and definitive for millions of families who are being affected by the high inflations after the COVID pandemic, which have impacted not only in the United States but in dozens of countries around the world.
The pilot program focused on people with simple tax returns based on W-2 forms. According to Yellen, Direct File will be expanded in the coming years to support a wider variety of tax situations.
Voices for and Against the Free Tax Filing Program
Several Democratic Party lawmakers have supported the Direct File program and are now looking to expand it further. Rep. Brad Sherman (D-California), an accountant and member of the House Financial Services Committee, said his desire is to go “far beyond Direct File,” advocating for a “self-completed form.” Sherman said that taxpayers should file their returns when the government already has all the necessary information, and thus save them mistakes when filing their taxes.
For her part, Senator Elizabeth Warren (D-Massachusetts), another important advocate of the expansion, urged all states and the District of Columbia to adopt the Direct File program to save taxpayers millions.
On the other hand, the spokesperson of the Alliance for Taxpayer Protection, Kara Zupkus, criticized the expansion of the program, arguing that it will significantly increase the authority and reach of the IRS and will have devastating consequences. According to Zupkus, private tax services have incentives to find the best deductions for taxpayers, while the IRS seeks to “extract as much as possible from the taxpayer.”
In addition, he claimed that this measure will result in “more delays and less money in the pockets of working Americans.”
