Exclusive: Congress pans planned last-second IRS expansion of Direct File: “House Republicans will work with [Trump] to repeal these disastrous and invasive actions”
The Biden administration's potential last-minute Direct File expansion, first reported by the Washington Reporter, is getting panned by Congress and by tax policy experts.
The Internal Revenue Service (IRS) is planning a last-second nationwide expansion of its controversial and heavily criticized Direct File service, multiple sources told the Washington Reporter.
Critics of Direct File note that it is an unauthorized program that allows the unpopular tax collection agency to act as “judge, jury, and Lord High Executioner,” Sen. John Barrasso (R., Wyo.) told the Washington Reporter. The IRS is poised to roll out a nationwide version of Direct File as early as Friday — the latest in a series of moves by the Biden administration to put the second Trump administration in a bind. The Reporter is the first to report this development.
Congress’s tax policy experts panned the plan to the Reporter. Rep. Kevin Hern (R., Okla.), the number four House Republican, said that “the Biden administration lost the trust and goodwill of the American people — badly. The best and most impactful thing it could do for this country is sit on its hands for the next 11 days. The American taxpayer is paying $814 for each return filed through the direct file program — there are plenty of free and easy-to-use services available in the private sector that render direct file redundant.”
Tim Hugo runs one of those free alternatives, called Free File Alliance. He told the Reporter that “the outgoing administration is trying to handcuff the incoming administration by locking in a program, Direct File, that is not needed and will put taxpayers on the hook for hundreds of millions of dollars going forward. The existing Free File program does everything that Direct File does and more including complex returns. For 23 years, Free File has provided over 75 million federal returns, valued at $3 billion dollars, at no cost to either federal or state governments and looks forward to doing it again in 2025 and beyond.”
Hern, the chairman of the House Republican Policy Committee, added that “expanding a controversial, costly and ineffective program at the 11th hour when President Trump is poised to take office in just a few weeks is a desperate ploy to force the Trump administration’s hand.”
Rep. Beth Van Duyne (R., Texas), who sits on the Ways and Means Committee, added to the Reporter that House Republicans will want to “repeal these disastrous and invasive actions.”
“After being rejected at the ballot box, this administration is using its final days to further expand the bloated bureaucracy by attempting another power grab that infringes on Americans’ right to privacy,” she said. “The ‘Direct File’ scheme is nothing more than an excuse to empower the blatantly partisan and weaponized IRS to gain access to more of our personal financial information. When President Trump returns to office, House Republicans will work with him to repeal these disastrous and invasive actions.”
Leading tax policy experts noted following the Reporter’s confirmation of this planned rollout that “the program should be shut down, not expanded,” the Taxpayers Protection Alliance (TPA) wrote.
“The Direct File program has been a waste of taxpayer money and unnecessary since its inception,” TPA’s president David Williams said. “From bypassing congressional approval to its lack of transparency over program costs, IRS leadership has shown that it is willing to ram through this dangerous program without any oversight or accountability. Despite the rightful pushback from Congress and advocacy groups, the IRS decided to double down and expand an expensive, unpopular, underutilized, and inefficient pilot program.”
“13 attorneys general asked the IRS last year to cease a tax prep program that was never authorized by Congress,” Americans for Tax Reform’s Patrick Gleason said. “[The] IRS is now going to expand the unauthorized program.”