The so-called “Big Beautiful Bill” that President Donald Trump signed into law on Friday instructs the IRS to deliver a report to Congress on how it could replace Direct File, the program that allows taxpayers to file their taxes for free directly with the IRS.
A previous version of the bill looked to terminate the program altogether. However, the final version appropriates $15 million for the Treasury Department to set up a task force to simply determine the cost of replacing the IRS’s Direct File program. The report is due 90 days from the bill’s enactment, or on Oct. 2, 2025.
The report would also include “taxpayer opinions and preferences regarding a taxpayer-funded, government-run service or a free service provided by the private sector,” according to the bill text.
Notably, Direct File has received positive reviews. The Government Accountability Office published a report in December touting the success of the program, saying that Direct File received top scores from 90 percent of taxpayers who used the tool.
Direct File is a web-based service that works on mobile phones, laptops, tablets, or desktop computers. It guides taxpayers through a series of questions to prepare their Federal tax return step-by-step. Once taxpayers have completed their Federal tax return, the Direct File system automatically guides them to state tools to complete their state tax filings.
The IRS successfully piloted its Direct File tool during the 2024 tax season, allowing more than 140,000 taxpayers across 12 states to file their tax returns with the agency electronically. The IRS made the program permanent in May 2024.
In October 2024, the IRS announced that the Direct File tool would be available in 12 additional states for the 2025 tax season, making the free e-filing service available in a total of 24 states.
Republicans have previously asked President Trump to end the Biden-era Direct File program, calling it “unauthorized and wasteful.”