IRS Discontinues Free Direct File Option for Taxpayers

Taxpayers in 25 states will need to consider new methods for filing their taxes in 2026 as the IRS has announced the termination of the free Direct File program. This initiative, which began under President Joe Biden, is officially coming to an end, although specific details are still sparse.

“Direct File has been closed. Details will be published at a later date,” reads the IRS notice.

Alongside this closure announcement, the IRS has provided limited answers to a few questions regarding tax returns, yet the information remains vague.

A key point addressed is the concern of users who previously accessed the program; they will no longer have direct access to their former tax returns. Instead, they’re now required to submit a form to request a copy of their return.

An email from IRS official Cynthia Noe confirmed this development to state comptrollers. The message stated, “IRS Direct File will no longer be available for the 2026 filing season. No future start date has been set.”

Current IRS Commissioner Scott Bessent indicated in a press briefing that there are “better alternatives” than the Direct File program.

“It wasn’t used much,” Bessent remarked, adding that the private sector could likely provide superior services.

A report by the Taxpayer Rights Center, based on a Freedom of Information Act request, disclosed that about 296,531 taxpayers filed accepted returns via Direct File for the 2025 tax year—a significant increase from the 140,803 accepted returns in its inaugural year of 2024.

This free service was aimed at taxpayers with an adjusted gross income of $84,000 or less in 2024. The IRS collaborated with eight private tax preparation firms to facilitate these free services, which were available in 25 states last year.

While Biden had announced plans to make this service permanent, opposition from Congressional Republicans, who labeled it as a waste of taxpayer dollars, resulted in pushback. They also noted that other free tax filing options exist based on filing status.

Additionally, private tax service companies, which generate substantial revenue from assisting taxpayers, voiced objections to the discontinuation of Direct File. Reports suggest the average American spends around $140 annually on tax preparation.