Direct File Won't Happen in 2026, IRS Tells States (nextgov.com) 93
NextGov: The IRS has notified states that offered the free, government tax filing service known as Direct File in 2025 that the program won't be available next filing season. In an email sent from the IRS to 25 states, the tax agency thanked them for collaborating and noted that "no launch date has been set for the future."
"IRS Direct File will not be available in Filing Season 2026," says the Monday email, obtained by Nextgov/FCW and confirmed by multiple sources. It follows reports that the program was ending and Trump's former tax chief, Billy Long, remarking over the summer that the service was "gone."
The program, which debuted in 2024, was a big shift from the decades-long IRS policy of not competing with the tax prep industry in offering its own free, online tax filing service for Americans. Many Republicans had opposed Direct File, and tax prep companies also lobbied against it.
"IRS Direct File will not be available in Filing Season 2026," says the Monday email, obtained by Nextgov/FCW and confirmed by multiple sources. It follows reports that the program was ending and Trump's former tax chief, Billy Long, remarking over the summer that the service was "gone."
The program, which debuted in 2024, was a big shift from the decades-long IRS policy of not competing with the tax prep industry in offering its own free, online tax filing service for Americans. Many Republicans had opposed Direct File, and tax prep companies also lobbied against it.
Of course (Score:5, Insightful)
Something which makes it easier and more convenient for people to file taxes cannot be tolerated.
Whatever it takes, you will pay. That is their goal.
Re:Of course (Score:5, Insightful)
The big tax preparation software companies lobbied strongly against the Direct File system, for obvious reasons.
They are just as obviously operating as a cartel, keeping their prices "in the same ballpark" without exactly matching. I remember a day when TaxAct was still a new entrant into the market, and it had excellent features and support at a price that significantly undercut TurboTax and H&R Block. Once it achieved popularity, its price suddenly jumped (a bit more than double) to match that of H&R block. Its features and support didn't improve at all; the price hiked and that was it.
TurboTax still charges more than the other two, creating an illusion of price competition. The truth is that TurboTax is significantly more popular, so it charges more, even though its features and service level are merely equivalent (at best).
So they all three ride on the same gravy train, and the last thing they want is a taxpayer-funded entity to provide a high quality option for free. They might have to actually EARN their income then! So they applied their considerable wealth to the political action of killing this offering, and succeeded.
Re:Of course (Score:4)
I've used TaxAct for years, out of familiarity more than anything, but find its user interface about as appealing as a dog's breakfast.
Re:Of course (Score:5, Informative)
This is probably the least surprising news from the current Sadministration this year. Popular program? Saved (common) people money? Cost very little to implement? Works really well? Reduces user errors? Reduces cheating? Yeah, we all knew it wouldn't last.
Re:Of course (Score:4, Insightful)
I'm sure the billionaires that run operations like Intuit TurboTax had no input on this delay, either.
Re:Of course (Score:5, Interesting)
The idea was to make you angry at the IRS and then to use that anger to get tax cuts for their billionaire buddies. It worked
You know that old Looney tunes cartoon where Elmer fudd turns into a sucker? If you voted Republican in the last 50 years that's you.
I'm not the one you should be angry at by the way
Re:Of course (Score:5, Informative)
Thanks to Newt Gingrich the IRS enforcement division was directed by Congress to devote the majority of their efforts to preventing fraud in the Earned Income Tax Credit, which only the poorest qualify for. Once upon a time their enforcement division was a money maker for the government as they could take on complex cases against the wealthy. No longer.
Re: Of course (Score:3)
It will be back when it gets rebranded under the Trump name.. TrumpTax.
Re: Of course (Score:4, Insightful)
This just confirms that the US is more like a banana republic than a land for the people,
Face it Dems - MAGA is in charge (Score:4, Informative)
You will pay the government AND you will pay the buddies of the legislature that lobby for broken ass tax laws.
America, where the bottom 80% gets fuck all, despite driving about 70%* of the US GDP through consumer spending alone.
Imagine being so incredibly ignorance of economics that you don't understand the multiplier effect or the fraction that consumer spending contributes to the national economy? You might decide that it's a good idea to add tariffs to nearly all imports, shutting down the government, and restricting air travel needlessly. Cutting SNAP benefits means taxpayer money won't be going back into our local economies. Instead it sits in a treasury account, and no economic activity is possible.
My econ professor would have ripped me a new one in class if I suggested any of these as a good idea. (I liked to take some of the worst essays from students and respond to them publicly)
* US Private Consumption accounted for 68.8 % of its Nominal GDP in Dec 2024.
Paying taxes should be easier (and free) (Score:1)
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The real winners, of course, are the commercial tax preparation software companies.
Remember when US voters were told they were going to win a lot?
https://www.cnn.com/videos/pol... [cnn.com]
Oh wait. That's a link from CNN which is fake news. My apologies.
Re:Paying taxes should be easier (and free) (Score:5, Insightful)
To be accurate, he said "we" are going to win so much, while leaving "we" ambiguous.
The missing definition of "we" is "we billionaires" but was purposefully left ambiguous so that ignorant salt-of-the-earth types would think they're included too when they never were.
"We" are now finding that out the hard way. Well, some of "we" - about 75 million people figured it out previous to the election last year, but not everyone learns at the same pace.
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Why do you need to fill out anything if everything is already reported by your employer and financial institution?
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Re: Fuck this country (Score:2)
You don't, really. You can just skip filing. The IRS will do your taxes for you and send you a bill if you owe money. But if they find they owe you money, they won't bother to tell you. And by the time it runs through the system, any money you owe will include a 60% late fee. If you don't owe much in taxes, this can be an effective way to handle your taxes. If you owe lots in taxes, you're going to be paying a lot to the government for tax preparation. And if the government owes you, this is an effective wa
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Because the tax code is a worm-hole infested pile of rat droppings that only a politician could love, and all those "deductions" have to be recorded somehow. The easiest place is the taxpayer since they are the ones taking the deductions.
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Because the tax code is so complicated, that even if all your income and withholding is reported by your employer, there are *still* choices you have to make in reporting your taxes. For example, did you have any employee business expenses? How many children or relatives do you support? Did you have job moving expenses? Did you have significant medical expenses? Did you give money or stuff to charity? Did you spend money as a teacher? And the list goes on and on.
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Taxes are pretty simple really. Uncle Guido(the government) takes x% of every dollar you make. it is November so I'm paying 15.3 Fed and Fica, all my current income atm is in the 22% bracket and the state and local taxes(blue state) takes another 6-8%. So just add it up and send the money.
Re: Fuck this country (Score:3)
I have had tax filings that were several hundred pages including worksheets. It would have been impossible to do reliably without software.
Taxes are not simple for everybody.
Re:Fuck this country (Score:5, Insightful)
provides little useful return in day to day life
I'm sorry, but WT actual F? Really. Do you like eating food that won't poison you? Do you like drinking water that isn't contaminated with lead, cyanide from mine tailings, malathion from fields, or salmonella from the pork processor? Do you like driving on paved roads? Reliable electricity? Court systems that function (except the Supremes, recently)? Air traffic control? Railroads and ports? Clean air? Flush toilets rather than outhouses? Living without the ever present threat of smallpox and polio?
Civilization costs money, and that money comes from taxes. We like civilization, that's why we vote to approve pretty much every tax bill on the ballot, YMMV. If you don't want to pay taxes you can move to Somalia or Haiti, or go live in your own Unabomber shack. Otherwise cough it up and pay your part.
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Taxes are pretty simple really.
I've seen some dumb comments in my time. But this is quite possibly the dumbest there is. Yeah taxes are pretty simple, that's why it's 6800 pages of legislation... You should offer your services to DOGE, let them know they can condense their tax code down to a Slashdot post. /s
And you also said taxes provide little useful return in day to day life... like huh?
Next time write your post as "I have no clue about anything." It's shorter and easier for others to read and covered all the points your post did.
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Even as someone who votes left more than any other way, I'd be entirely okay with killing the AMT. It is a huge pain to deal with.
The real problem, IMO, is that Congress needs to get off its a** and pass laws requiring brokerages and retirement plans to provide all of the tax data in a fully computed form so that you can fill in the boxes on your tax worksheet and be done, rather than having to look through every single line and figure out which ones were short-term, which were long-term, which had foreig
Re:Fuck this country (Score:4, Insightful)
Awesome analysis. /s
Now take a crack at this one:
IF the government receives all the same paperwork that I do for filling out that 1040 form and dropping it in the mail;
AND they use that exact same paperwork for checking my math for any of hundreds of tiny mistakes that can be made;
AND they are always thought to be right, with the burden of proof otherwise being on me
WHY does each and every one of us need to bother with this bullshit instead of receiving a 1040 that we can review and open a request if we think it's wrong?
This process is so fucking backwards it's not even funny.
Re: Fuck this country (Score:2)
The reality is they don't everything. My girlfriend moved some Bitcoin onto an exchange and sold it. The exchange reported it with a $0 cost basis because they had no idea where the Bitcoin came from. But it's not accurate. My girlfriend reported the correct cost basis, benefitted from the lower taxes, and went on with her life.
Re: Fuck this country (Score:2)
Meant to say they "don't KNOW everything"...
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drop it in the mailbox for free.
I don't think that will work. You need to pay to mail it. What is really interesting is that it will cost far more for the IRS to process it. Interesting that DOGE missed that isn't it?
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No you don't. Fill out a 1040 and drop it in the mailbox for free. If you can't figure out the 1040, it means you're making enough money to afford a CPA to do it for you.
What you said is basically true, but ...
I have mailed in my tax forms in the past, but no way would I "drop it in the mailbox". Mail theft is becoming more common, and the tax forms are a gold mine for mail thieves and identity theft thieves, and you really don't want to be a victim of that.
I think the main value of IRS direct file wasn't whether it's free or not, but that you can do electronic filing and avoid using the mail.
This is what sucks.
What the IRS has done is giving you the choice of using a tax p
Taxes are a government requirement (Score:5, Insightful)
Since taxes are required by the government, and go to fund the government, the government should be doing everything it can to make filing easy and accurate.
A good tax filing platform, like a road, is a public good [google.com]. However, private companies also make tax filing platforms, and one provided by the government is competition to them, and reduces profit. So, it makes sense they would try to eliminate the government option. They can privatize and profit from this public good.
Government is influenced by everyone from individual citizens to large corporations, via money. I have found this page, at Open Secrets, to be very useful in understanding all the ways that legal constructs (businesses, unions, etc) and people can direct money to the government: https://www.opensecrets.org/resources/learn/glossary [opensecrets.org]
Re:Taxes are a government requirement (Score:5, Insightful)
the government should be doing everything it can to make [X] easy
Not according to this group. As Grover Norquist told a bunch of neocons in the '90s, "You're not going to be able to convince voters that government is broken unless you break it first." (He's the conservative 'thought leader' who said he wanted to use the debt to reduce government to the size where "I can drag it into the bathroom and drown it in the tub.)
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Small potatoes (Score:1)
Of all the things that rub me the wrong way about the current administration, this barely makes the list. The conservative peanut gallery loves to point at the left for wanting "free shit" and a free tax prep service is practically the closest they've gotten to having a point. You can technically do your taxes for free by manually filling out the forms yourself. Admittedly, they're a bit confusing and getting some advise might be required, but once you've got the gist of it - it's the same process every
Re: Small potatoes (Score:2)
The calculation for health care gap penalty in CA was so fucking complicated, I just put in the max penalty and paid that. Then they sent me a notice telling me I fucked up and they owe me money.
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You can technically do your taxes for free by manually filling out the forms yourself.
I can't think of any business or other government function that still makes me fill out any paper forms. At one recent employer I did not fill out a single paper or PDF-style form, HR or otherwise, in the entire experience from the day I applied until the day I resigned.
Nobody uses paper forms any more. Everything is online. Taxes should be no different, and there should be no 3rd party middlemen collecting tolls for the "privilege" of doing something online the way everything else is done.
Re: Small potatoes (Score:2)
DMV still has me fill out paper forms. So does the court when I do jury duty.
Any open source alternatives? (Score:2)
Re: Any open source alternatives? (Score:2)
People have tried. But it's a tough nut to crack. There's a ton of work that needs to get done and it potentially changes every year and sometimes might change multiple times per year. Some changes might be last minute.
In order to keep something like this up to date, you kind of need to have a paid staff to react to legislative and policy changes. And that requires a certain amount of centralization and customer base to make it work.
A nice $B-aire could fund this if they wanted. But I would be skeptical of
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Asteroid would be better, no fallout that way.
It's one reason Trump's leaning into redistricting (Score:5, Insightful)
Project 2025 is basically a billionaire wishlist - most of its elements will actively hurt anyone who's not super-rich, and Trump and his masters know they can't really hide that fact anymore. They also know they're almost certainly gonna get hammered - in the popular vote - in next year's midterms, so they need to stack the deck. Fortunately for them, there are enough ultra-rich Republicans running a few of the more populous states - who know Project 2025 benefits them as well.
The downside (from the GOP point of view) is that even in GOP-led states, the big cities tend to lean Democrat - and redistricting alone may not be enough. So they're working towards pre-staging the Border Patrol and National Guard in as many of those cities as they can, getting ready for active voter suppression.
Re: It's one reason Trump's leaning into redistric (Score:2)
"Border Patrol and National Guard in as many of those cities as they can, getting ready for active voter suppression."
Good luck with that. They can barely secure a city block much less dozens of polling stations scattered around the city. Their numbers are not designed for that kind of operation.
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They don't have to actually secure anything, though. All they have to do is stand around and look intimidating. And maybe arrest the occasional voter and demand proof of citizenship. Make you feel like a criminal when you dare to vote. These deployments are not about security. They are about reminding people who's in charge and discouraging voting among certain demographics.
Meanwhile I feel really bad for the national guard troops. Many of them know they are being deployed dishonestly. They are being
MAGA! (Score:3)
Fucking you over makes America great again.
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No, no. Depending on which state they're from, that could be more than enough.
Shouldn't even need to file in the first place. (Score:5, Insightful)
The IRS should send everyone a note that says "here's what we have so far, is there anything else that we should know?" And "here's the tax amount that we calculated, is there anything you'd like to do differently?"
For most Americans, the answers would be no and yes, and then it's just a matter of settling the balance.
(Make the penalty for failure to disclose income bigger, because a lot of people will view the first question as an invitation to lie.)
Given how much gets reported to the IRS automatically, the only remaining purpose of filing a return is just to give the government an opportunity to penalize anyone who gets it wrong. And as the tax code gets more complex that they are increasingly setting us up to fail. It's just sadistic.
Make it a service, not an ordeal.
how taxes work in Sweden (Score:3)
This is how it works in Sweden. Employers and banks report to the tax agency, and once a year you get an overview of what they have got, and a preliminary calculation. If it's correct, just can just sign the paper version and send, or sign with e-id or one time code at the government e-service. There you can also make common deductions (like commuting expenses) before signing, and the tax will be adjusted accordingly.
The tax agency also has guides how to do different kinds deductions. They also has a mostly
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In Denmark we don't even have to sign it; lack of response is considered agreement to the calculations.
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This is how it works in Sweden.
This is how it works in virtually every first world country.
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It works like that in Australia (Score:2)
You wait for the "pre-fill data" to arrive, log in to myGov, everything's pre-populated with income earned, tax withheld, etc. You just fill in the expenses you're claiming, offsets, additional income (e.g. foreign income), and whatever else, then click submit. For the last few years, the only things my wife and I have really had to enter manually is spouse's taxable income (she copies the pre-filled number from mine, I copy the pre-filled number from hers) and how we want to claim the Medicare levy reduc
IRS Free File Fillable Forms (Score:4, Informative)
Will still be available AFAICT. Free File Fillable Forms [irs.gov] are basically just the PDF forms which are connected to the IRS and are electronically processed by them. I've used them the past few years. They offer no hand holding like the commercial products so this does require you to understand your taxes and most of the basic forms.
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Yeah, I've used them in the past. This time, I think I'll still use them - but then print them out and mail them in.
I might hand-write in a couple of the numbers, just to add to the burden.
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I've mailed paper forms a couple of times when I've gotten annoyed at the cost of commercial offerings. But, unfortunately, my dependent son gets denied when I file on paper. Seems his name is too long to fit the old COBOL bit that matches his name/SSN up against the SSA database, so the last two letters of his name get chopped off and don't match. This requires a call to the IRS where someone is able to fix it for me -- usually. Last time this happened was during covid when it was impossible to get anyone
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You know now that everyone on this site wants to know what the heck you named your son, and why, don't you?
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Sheesh, I tried making a "Bobby Drop Tables" reference here, but Slashdot wigged out!
Someone needs to work on their table sanitization...
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Here you go:
https://xkcd.com/327/ [xkcd.com]
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Yeah, I was trying to actually type in the kid's name, but the Slashdot submit process seemed to hang perpetually.
Of course, everyone could rebel (Score:2)
and file handwritten paper returns.
Right now the commercial solutions do save time. If or when they start jacking up the prices, then the value proposition may change.
!free, good riddance (Score:1)
I believe these were all simple returns, returns that could easily have used any of the existing free filing services, at no cost to the taxpayer.
These aren't just startup costs; the IRS estimated the running costs to be between $64M and $249M annually (so probably around $750M annually).
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And I'm speaking from experience. I'm in the UK. I've recently filed my annual self-assessment tax. I used the free service on the UK government web site and the
Re: !free, good riddance (Score:2)
I THINK what they are saying is with the number of people who actually used the service, the cost per filing was $140 or whatever.
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The problem is that it is overly complicated for anyone but a simple income earner. And as most people point out, the government already knows most of the numbers to the point they could fill out a preliminary form that would work most people.
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existing free filing services, at no cost to the taxpayer
Do you honestly think these filing service companies are letting you file 'for free' on their own dime? No, they are paid by the government so that your filing looks free, but it was paid for by those same taxes. Much better to keep the expenses in house with direct.file and let all these tax preparation companies go bankrupt.
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The money spent on this program is estimated to be somewhere between $41M and $129M. At the low end, $41M, that's $138 per return, or $434 at the high end.
I believe these were all simple returns, returns that could easily have used any of the existing free filing services, at no cost to the taxpayer.
These aren't just startup costs; the IRS estimated the running costs to be between $64M and $249M annually (so probably around $750M annually).
The high per-return cost is due to two things. The pilot year was 2024 (2023 earnings) so we've only had one year, and it was limited to 13 states.
The rollout year for almost anything is a money loser, and especially would have high per capita costs.
The existing corporate free filing services are limited to poor people, and there are many of us who don't want to be data-mined or risk insiders such as temp worker off shore clerks selling the keys to our house to thieves.
As for the on-going costs, the IRS spe
what more evidence is needed? (Score:1)
OK fine, I'll file by paper-mail (Score:1)
It will cost the government more to process the return.
If everyone did this and they made it clear to their representatives WHY they were doing it this way, it might "move the needle."
There was no reason to develop it to begin with (Score:1)
DirectFile was a nice effort but the reality is that after spending 25 million dollars developing it the product was nowhere near as mature as the free commercial services that are already out there. It would have cost many millions more to enhance it further, scale it up, and support it going forward and that was just to provide Federal tax filing services. You would still need to do a state return which again the available free services already offered.
If you think the project has merit then take the so
10 more years (Score:2)
Trump's gift to his cronies (Score:2)
Trump's cronies in the tax-filing business must have given him nice bribes.
The government should be the one filing taxes. It should cost citizens zero out of pocket unless they want to contest it.
Pay taxes? (Score:2)
At the rate the shutdown is going, perhaps we should take a cue from the billionaires and just stop paying.
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I can't say I would blame them.
Scumbags (Score:1)
Open Source? (Score:2)
I'm pretty sure I could vibe code a PWA in a few hours that would work for 80% of Americans.
How would I fund it?
$0.78 for a stamp.
$0.10 per page to print
$0.50 for an envelope
Total $1.38
Consider payment fees and such and we can settle on $3 to click submit and I'll print and mail your tax form for you. Or, you can do it yourself. Same, same.
Thank goodness I don't live in the states. My taxes are "log into government web page, see if it's worth my ef