The Direct File Act would reverse the Trump administration’s decision to cancel Direct File, building on widely successful pilot  

WASHINGTON – Senator Ruben Gallego (D-AZ) joined over 150 lawmakers in introducing the Direct File Act to reinstate and permanently codify the highly successful Direct File program which allowed taxpayers to file their taxes online, for free, and directly with the government. The program was canceled by President Trump last year.  

“Working families shouldn’t have to pay a preparing company or jump through hoops just to file their taxes,” said Senator Gallego. “The Direct File program cuts the red tape so families don’t have to worry about the tax maze. That’s why I’m backing this bill to make tax filing as straightforward as it should be for Americans.”

The average American taxpayer spends eight hours and $160 each year filing their taxes with tax prep companies. In 2024, the IRS launched Direct File to save families time and money. 94% of users described their experience as “excellent” or “above average,” and more than 70% of taxpayers said they would use Direct File if they were eligible. If fully implemented, Direct File was projected to save families up to $23 billion annually in fees, time, and tax credits.

Despite Direct File’s success, the Trump Administration ended the program after extensive lobbying efforts by tax prep companies. This decision contradicts recommendations from the independent Government Accountability Office and Treasury Inspector General for Tax Administration, ultimately raising costs for Americans and making the tax filing experience even more burdensome.

In addition to directing the IRS to establish and operate a free online tax preparation and filing program, the Direct File Act would:

  • Prohibit the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services.
  • Direct the IRS to publish an annual report on use levels, patterns of usage, and ways to improve access to Direct File.
  • Direct the IRS to enable seamless integration between state tax filing systems and Direct File, including through information sharing and a new grant program for states.
  • Reduce tax fraud by getting third-party income information to the IRS earlier in the tax season, allowing the agency to verify this information before issuing refunds.

The Direct File Act was led by Senator Elizabeth Warren (D-MA) and Rep. Brad Sherman (CA-32) and has been endorsed by 115 unions, advocacy groups, and national organizations.

Full text of the legislation can be found HERE.