Doing For-Profit Tax Industry's Bidding, GOP Calls On Trump to Cancel Direct File Program
"This is the most efficient way and cost-efficient way for millions of people to pay their taxes," said one advocate.
Responding to the "absurd" news that more than two dozen U.S. House Republicans are calling on President-elect Donald Trump to end the Internal Revenue Service's Direct File program, Rep. Gerry Connolly came to one conclusion: "Republicans want to make your lives more difficult."
The Virginia Democrat wasn't alone in denouncing a letter penned by Reps. Adrian Smith (R-Neb.) and Chuck Edwards (R-N.C.) and signed by at least 27 other Republicans who called on Trump to sign a "day-one executive order" to end the free tax-filing program that allowed roughly 140,000 taxpayers to save an estimated $5.6 million in filing costs this year.
Direct File, which was introduced as a pilot program in 12 states in the last tax filing season and is set to be expanded to 24 states and more than 30 million eligible taxpayers this year, is "a free, easy way for people to file their taxes directly online with IRS," said Sen. Elizabeth Warren (D-Mass.).
The software allows taxpayers to keep their entire tax refund "rather than paying $150 to a sleazy tax prep company," said the senator, adding that Republicans evidently want Americans "to keep wasting money on TurboTax," the popular tax filing program run by Intuit, which reported a net income of $2 billion in 2023 and spent $3.5 million on federal lobbying the previous year. The private tax filing industry has spent decades lobbying to ensure a system like Direct File wouldn't be made available to Americans.
In the letter, the Republicans claim the Direct File system is "unauthorized and wasteful" and that "the program's creation and ongoing expansion pose a threat to taxpayers' freedom from government overreach."
The Republican lawmakers also sent the letter to billionaire businessmen Elon Musk and Vivek Ramaswamy, Trump's nominees to lead the proposed Department of Government Efficiency (DOGE).
In the letter they claim to want to protect "hardworking Americans" from the "overreach" of the IRS, but as In the Public Interest founder and executive director Donald Cohen told Common Dreams on Wednesday, the Direct File program is "incredibly popular" with those who have used it.
"This is the most efficient way and cost-efficient way for millions of people to pay their taxes," Cohen said. "So what the Republicans want to do is make it more costly, more complicated, and more profitable for the big tax software vendors."
Cohen also questioned how Smith and Edwards could argue, as they do in the letter, that Direct File is a "clear conflict of interest."
"It is in all of our interests for the federal government to... collect taxes in the most efficient and cheapest way," he told Common Dreams.
On the contrary, he said, private tax software companies like Intuit and H&R Block are incentivized to fight against Direct File, which keeps them from collecting about $1 billion in filing fees as well as users' data.
At the Center on Budget and Policy Priorities, vice president of tax policy Chuck Marr said Republicans who signed Wednesday's letter are essentially pushing for "a tax on paying taxes."
Ernie Tedeschi, director of economics at the Yale Budget Lab and the former chief economist of the White House Council of Economic Advisers, argued that Direct File "does what policymakers should be in favor of: It makes a core government function more efficient and user-friendly, in a way that's accessible for everyone."
