The measure appoints the Treasury to work with the private sector to create another option.
Internally, the Internal Revenue Service (IRS) direct file platform is terminated as the House is considering the budget adjustment bill.
On page 370 of the measures on page 389, the lawmaker proposes that “within 30 days from the date of enactment of this Act, the Secretary of the Treasury shall ensure that the Internal Revenue Service’s direct file program has ended.”
On the next page, lawmakers will seek to create a task force to create a better public-private collaborative effort between the IRS and private tax service services. This could include products such as TurboTax and H&R blocks to offer free services to exchange current IRS aid programs.
The bill would allow the Treasury to use up to $15 million in funds to produce reports analyzing the costs of replacing files directly with another service, allowing around 70% of US taxpayers to file returns for free. The Treasury was given 90 days to complete the report and sent to Congress.
Related Stories
In May 2024, the agency announced that the program would be permanent.
The IRS has accepted 140,803 returns filed by taxpayers using direct files in 12 states where the last tax season is available. This year it has been expanded to include half of the country. It is unclear how many taxpayers used the file directly this year.
“The program is efficient and effective, keeping their data safe from misuse while providing important services to millions of Americans. Congress does not need to pass laws to continue this progress,” the lawmaker wrote.
Bessent said at a Senate confirmation hearing in January that he would maintain the file in person for at least for the time being.
“For this tax season, the direct file promises to be up and running by American taxpayers who choose to use it,” Bescent told the Senate Finance Committee on Jan. 16.
Earlier this year, Trump adviser Elon Musk, a special government employee, wrote on social media that 18F, a government agency that worked on direct files and other technology-related government programs, was fired.
The Associated Press contributed to this report.
