Concerns Over IRS Free Tax Return Tool

This year, when the so-called Office of Government Efficiency (DOGE) joined the Internal Revenue Service, leaders assured employees that the agency’s free tax return option, known as direct file, would be safe from cuts. Yet, only days after meeting with a tax software lobbyist, reports surfaced that this popular service was now under threat, according to multiple sources familiar with the situation.

The initiative to potentially eliminate direct file—an IRS tool used by taxpayers in 25 states—was spearheaded by Sam Corcos, the CEO of Andreessen Horowitz Health Startup, which has ties to SpaceX. He presented his proposal for cutting popular services to Treasury Secretary Scott Bescent in early March, as confirmed by sources close to the discussions.

Interestingly, just the weekend before Corcos recommended shutting down direct file, he had voiced support for the IRS engineer team. By Friday, however, his stance had completely shifted. As sources have indicated, while direct file will still be available through the 2025 tax season, there’s serious doubt it will survive into the following year.

“The tone has shifted throughout the week,” one source remarked, noting that the decision to potentially end direct file seemed to come unexpectedly.

In the days following that weekend meeting, Corcos revealed he had also spoken with Free File Inc., previously known as the Free File Alliance. This group, created over 20 years ago by Intuit—maker of TurboTax—was designed to provide free filing services to low-income taxpayers. In exchange, the IRS agreed not to establish its own government-operated online filing system.

Before assuming his role in January, Doge Davis, along with Steve Davis, CEO of Elon Musk’s Boring Company, and Amy Gleason, acting manager of U.S. DOGE Services, expressed their support for the direct file project, assuring the engineering team of its stability. Although Davis stepped down last month, he continued to influence meetings and directives, reportedly facing resistance from Corcos.

The IRS did not respond to inquiries from Wired regarding these developments. Currently, Corcos serves as the Chief Information Officer of the Treasury Department.

David Ransom, a tax lobbyist representing the American Union for Taxpayer Rights, mentioned, “We think the IRS should reassess its priorities and focus on significant modernization efforts.” Notably, two tax preparation firms also aligned with the Union are part of the free file alliance, with Intuit and H&R Block having departed that alliance by 2021.

Before Intuit’s exit, ProPublica highlighted that the company had made accessing the Free File service exceptionally challenging, essentially hiding it from users who relied on search engines like Google.