IRS expands free Direct File service to 25 states, but continues to face scrutiny

As tax season approaches, lawmakers are divided on the future of Direct File, the IRS’ free tax filing program. Direct File, which has recently expanded to limited taxpayers in 25 states, processed about 140,000 returns in 2024 during the pilot program that launched mid-season. While Democrats support the program, Republicans have criticized it and pushed to end the free filing service. The future of Direct File is uncertain, especially under GOP control of the White House, Senate, and House of Representatives.

During a Senate confirmation hearing, Scott Bessent, President-elect Donald Trump’s pick for Treasury secretary, pledged that Direct File would be operational for the upcoming tax season if confirmed. This statement comes as more than 130 Democrats, led by Sens. Elizabeth Warren and Chris Coons, voiced their support for Direct File in a letter to Bessent and Billy Long, Trump’s pick for IRS commissioner.

Democrats argue that Direct File makes interacting with the government more efficient and saves consumers money on tax preparation fees. On the other hand, Rep. Adrian Smith and other House Republicans have called for an end to the program, citing concerns about government overreach and operational costs. Despite these criticisms, Direct File remains a topic of debate among lawmakers from both parties.

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