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The future of IRS Direct File appears increasingly uncertain as skepticism mounts within the DOGE organization and the Treasury Department dismisses the free tax-filing initiative as a program that has failed to meet expectations.

Sam Corcos, a prominent official within DOGE and one of its leading spokespeople, has openly questioned the viability of the IRS Direct File system. According to insights shared with Business Insider by a former federal employee, Corcos has suggested that the initiative should be discontinued altogether. This perspective has been corroborated by two individuals who are familiar with Corcos' stance through conversations with his associates.

A senior official from the Treasury Department echoed these sentiments, characterizing the Direct File program as both disappointing and ineffective, used by only a small percentage of taxpayers across the nation. While the official clarified that no immediate decisions regarding the program's future have been reached, the uncertainty surrounding it has cast a shadow over those who view Direct File as a crucial component of DOGE's broader mission.

The primary objective of Direct File is to provide a straightforward, technology-driven solution for taxpayers to file their returns directly with the IRS, thereby avoiding the fees typically charged by private tax-preparation software companies. A report released by the IRS in December 2024 revealed that taxpayers, on average, expend approximately $160 and around eight hours to prepare their taxes each year.

Danny Werfel, a former IRS commissioner who served until January, highlighted the dual nature of the current scenario. "On one hand, you have a broader ambition through DOGE to automate IRS operations and create a more online IRS that would justify the significant reductions in force that are underway," he stated. "On the other hand, you have a very strong contingency in Congress and an industry that argues this activity should remain primarily within the private sector."

Critics of the Direct File initiative argue that it is not only financially burdensome but also question its legality. Representatives from major tax preparation firms like H&R Block and Intuit, known for its TurboTax software, pointed out that free tax preparation services have been accessible to Americans for many years.

It remains unclear how the views expressed by DOGE and Corcos will influence the policies of the Trump administration. Elon Musk, often considered the face of DOGE, previously claimed in February that he had "deleted" a government agency that played a role in developing the Direct File system. This statement came just months after reports surfaced about his interest in creating an app to facilitate tax filing for Americans.

Interestingly, the Treasury official's assessment of the Direct File program differs from earlier commitments made regarding its future. During his confirmation hearings, Treasury Secretary Scott Bessent assured that the program would be maintained through the 2025 tax season.

The situation presents a dilemma for DOGE: While Direct File is a potential candidate for budget cuts, it also represents a pioneering technological solution that could streamline tax filing. Advocates for the program argue that preserving or even enhancing the system could serve as a prime example of DOGEs goals, provided it is given a chance to thrive.

Currently, approximately 32 million American taxpayersor about one-fifth of the totalare eligible to utilize Direct File this year, and supporters are eager to promote the initiative.

A pilot program conducted last year garnered high satisfaction ratings. Nearly 141,000 individuals used Direct File for their tax submissions, and an impressive 90% of them rated their experience as "excellent" or "above average." Additionally, 86% reported an increase in their trust toward the IRS as a result of their experience. A survey conducted in December by the Urban Institute, involving over 7,000 adults, found that 73% of tax filers expressed interest in using Direct File, yet 68% admitted they did not have enough information to feel confident in using the system.

A Treasury official highlighted user feedback, quoting a Direct File user who remarked, "I don't cry when I do my taxes using Direct File." This positive sentiment reflects the potential benefits the program can provide.

The IRS had anticipated that between 920,000 and 3.7 million users would leverage Direct File this year. However, the agency has not yet disclosed the actual number of users, and it noted that website traffic data cannot be directly compared to last year due to changes in data collection methods.

Despite the program's popularity and encouraging early usage signs, awareness remains a significant hurdle. Many Americans became aware of the tool only after Musk's announcement about its supposed deletion, leading some to mistakenly believe the program was being discontinued. Insights from former government employees indicate that Musk's comments undermined the IRSs messaging, which aimed to assure the public that the program would continue. Following Musk's announcement, Google search interest for "Direct File" surged to its highest point.

There are voices within and outside the government urging the IRS to enhance its outreach efforts. While the agency has mentioned Direct File in several press releasesoccasionally in conjunction with the Free File program, which offers low-income individuals free access to private tax-preparation solutionsit hasnt hosted any media calls focused on Direct File since October. Accessing information about the program from the IRS homepage can require navigating through several clicks.

A Treasury official, who spoke on the condition of anonymity, stated, "If you give a program some time, growth will increase, and then something like that can take off. Imagine if they had killed e-file in 1989 or 1988 before it really even was able to get going. This is a program where we've seen people really satisfied."

In 2022, Congress allocated $15 million to explore establishing a direct online tax filing option with the IRS that would eliminate the need for complex tax forms. Within just a year, a prototype was developed, thanks to the collaborative efforts of numerous tech workers from the IRS and other federal agencies who worked together to launch Direct File for a limited set of taxpayers.

As someone involved in the program noted, "We effectively launched a startup within the IRS." This innovative spirit reflects the potential for modernizing government services.

However, Republican critics have voiced strong opposition to the initiative, arguing that the IRS has overstepped its legal boundaries in making Direct File a permanent fixture. In a letter addressed to Werfel, former IRS Commissioner, Senators Mike Crapo and John Barrasso expressed their concerns: "The IRS does not have unlimited resources and should focus on improving information technology systems, data privacy, and long-standing customer service issues. It should not be focused on unilaterally expanding its own power, without congressional approval, through a permanent government tax preparation scheme that is unnecessary, problematic, costly, and illegitimate."

Critics have also forecasted that the program could incur billions of dollars in expenses, although a recent report from the IRS inspector general revealed that the total costs associated with running Direct File were approximately $33.4 million last year, a figure said to potentially underrepresent the complete financial impact.

Despite the prevailing confusion among the public, interest in the program appears to be growing as tax season draws nearer. Data from the week ending April 7 indicated that the number of active users on directfile.irs.gov accounted for roughly 8% of all visitors to the IRS homepage, compared to about 5% three months earlier.

Vanessa Williamson, a researcher at the Brookings Institution, noted, "On one hand, lots of people using and liking Direct File would help protect the program. On the other hand, were really in uncharted waters in terms of how decisions are being made at a federal level."

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