A group of Senate and House Democrats is introducing legislation that would bring back the Direct File free tax preparation program that was recently ended by the Trump administration.
Sen. Elizabeth Warren, D-Massachusetts, introduced the Direct File Act last Friday in the Senate, along with Rep. Brad Sherman, D-California, in the House, joined by over 150 other lawmakers, with the support of 115 unions, advocacy groups and national organizations.
The Internal Revenue Service began
The
- Prohibit the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services;
- Direct the IRS to publish an annual report on use levels, patterns of usage and ways to improve access to Direct File;
- Direct the IRS to enable seamless integration between state tax filing systems and Direct File, including through information sharing and a new grant program for states; and,
- Reduce tax fraud by getting third-party income information to the IRS earlier in the tax season, allowing the agency to verify this information before issuing refunds.
"It's a no-brainer: Americans should be able to file their taxes easily and for free," Warren said in a statement last week. Donald Trump canceled Direct File after giant tax prep companies spent millions lobbying to protect their profits. We're fighting to lower costs for families by bringing Direct File back and making it the law of the land."
Proponents of the bill point out that the average American taxpayer spends eight hours and $160 each year filing their taxes with tax prep companies. After the IRS began testing Direct File in 2024, 94% of users described their experience as "excellent" or "above average," while over 70% of taxpayers said they would use Direct File if they were eligible. If fully implemented, Direct File was projected to save families up to $23 billion annually in fees, time and tax credits.
"Americans shouldn't have to waste valuable time or hard-earned money just to file their taxes," said Sherman in a statement. "The Direct File Act expands on the successful 2024 pilot and offers a straightforward, no-cost filing option that will make the process simpler and more affordable for working families."
The decision to end the Direct File program came despite recommendations from the
"A free, direct e-filing tax return system is a fundamental taxpayer right," said Nina Olson, executive director of the Center for Taxpayer Rights and former National Taxpayer Advocate, in a statement. "Just as the government designed and printed paper tax forms for years, so should it design and maintain a user-friendly electronic filing option for individual taxpayers."
The IRS has continued its
