The Internal Revenue Service (IRS) has officially informed Oregon and several other states about the cancellation of the IRS Direct File program, a free service introduced under the Biden administration aimed at allowing millions of Americans to submit their federal tax returns electronically at no cost by April 15. This decision has sparked significant backlash from Democratic lawmakers, with many criticizing the previous Trump administration for undermining public services that were designed to benefit citizens.
Oregon Senator Ron Wyden publicly condemned the cancellation, arguing that it primarily serves to benefit large private companies that charge taxpayers for tax-filing software. He described the Trump administration’s actions as a targeted assault on public services that offer time and cost savings for the working class. “The only thing Trump accomplishes by doing this is stealing from working-class taxpayers to pad the profits of giant, rent-seeking tax software companies,” Wyden stated in a press release.
Massachusetts Senator Elizabeth Warren echoed these sentiments, asserting that tax filing should be straightforward and accessible for everyone. She criticized the Trump administration for paving the way for tax preparation companies to profit at the expense of average Americans, stating on social media, “Thanks to Donald Trump, giant tax prep companies are popping champagne, while Americans are forced to spend more time and more money to file their taxes.”
Statistics from the U.S. Department of Treasury reveal that taxpayers spend an average of 13 hours and $270 preparing their tax returns each year. The IRS Direct File program was reportedly well-received, with a survey indicating that 90% of users rated it as above average or excellent. Initially launched on a pilot basis for the 2023 tax year, the program was set to expand nationwide by 2024. However, an email sent by the IRS this week announced that the program will be discontinued starting in early 2026, impacting tax filings for the 2025 tax year.
Despite the cancellation of IRS Direct File, taxpayers in Oregon will still have access to a separate program called Direct File Oregon, which is a two-year-old initiative that allowed around 14,000 residents to file their personal income taxes for free earlier this year. This number is expected to increase, though it was previously linked to the federal program. A spokesperson for the Oregon Department of Revenue indicated that roughly 4,700 Oregonians utilized IRS Direct File, a small fraction of the estimated 650,000 eligible taxpayers in the state.
Wyden expressed disappointment over the cancellation, noting that the initial uptake of the Direct File service suggested it would continue to grow. He criticized the decision as a loss for those seeking affordable and efficient tax-filing options. Conversely, some Republican lawmakers have defended the move, claiming that taxpayer dollars are being wasted on the IRS Direct File system, particularly in light of the existence of other free services. However, critics argue that the multitude of choices complicates the process for individuals and often leads to upselling of more expensive services by private firms.
In a related note, Elon Musk, who has advocated for greater efficiency in government operations, has also supported the dismantling of the IRS’ free filing system. As discussions around tax preparation continue, the implications of this cancellation may significantly affect the landscape of tax filing for millions of Americans in the years to come.
