By Kenneth Corbin

It appears that millions of taxpayers will still have a free option to file their taxes online through the Internal Revenue Service this season.

The IRS rolled out Direct File as a pilot program last year. Availability was limited to 12 states, and only filers with fairly basic tax situations were eligible to use it.

The agency heavily promoted Direct File, talking up high user-satisfaction rates from the 2023 filing season as it prepared to expand the program to cover more states and tax situations this year. A person in the IRS who wasn't authorized to speak publicly describes the project as a "point of pride" within the agency.

But following the election of President Donald Trump and the launch of a large cost-cutting initiative across the federal government led by Elon Musk, the fate of Direct File became an open question, in part because it has faced intense criticism from Republicans in Congress.

Musk added to the confusion with a recent post on X responding to a user who objected to Direct File and 18F, the unit of technologists housed in the General Services Administration that works with other agencies to develop technology projects. The 18F team was involved in the creation of Direct File.

Musk's response to the post read: "That group has been deleted."

He appears to have been referring to 18F, not Direct File itself. A second person in the IRS, who asked to remain anonymous, indicates that the agency is planning to continue the expanded trial of Direct File as described in its announcement of the opening of filing season. On Monday, the IRS put out a news release warning taxpayers to be careful with their personal information when selecting a tax preparer. The release included links to its own filing resources, including Direct File.

Treasury Secretary Scott Bessent pledged in his confirmation hearing to keep Direct File operational through this tax season but didn't commit to extending the program into the future.

The fate of 18F is more uncertain. The group's account on X, which is owned by Musk, has been deleted. As of Tuesday afternoon, information about 18F and its work over the years was still available on the GSA's website.

18F, so named for its location at GSA headquarters at 18th and F Streets in Washington, launched in March 2014 as part of the Obama administration's effort to modernize government information technology. It promised to bring a lean, start-up-like culture to government IT, saying the team, drawn from the government and private sector, was "passionate about 'hacking' bureaucracy to drive efficiency, transparency, and savings for government agencies and the American people."

On its face, that sounds similar to the mission of the Department of Government Efficiency initiative that Musk is leading. In a news release last March marking 18F's tenth anniversary, the GSA said the group had completed 455 projects for 34 agencies, as well as the White House, the House of Representatives, and the Library of Congress.

The GSA didn't immediately respond to requests for comment on the status of 18F, but the fate of that group shouldn't have a significant impact on Direct File.

"The bottom line is that 18F helped build the tool, and since it was created it has been handed off and been implemented through the IRS team itself," says Susan Harley, a managing director at the watchdog group Public Citizen, which has been working with states, members of Congress, and the IRS to promote Direct File as an alternative to commercial tax-preparation services. "Even if it were quote unquote 'deleted,' they're not the ones who are currently in charge of the tool. That is IRS staff who are doing that."

She says she has been in routine contact with the IRS and officials in the 25 states whose residents will be able to use Direct File this season and says she hasn't heard any indication that the program could be in trouble.

"Our expectation is full speed ahead through the rest of 2025," Harley says. "No one I've spoken to recently has given any sort of hint that there's a threat about the program."

Write to advisor.editors@barrons.com

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February 04, 2025 16:20 ET (21:20 GMT)

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