When government bureaucrats start creating programs to solve problems that already have solutions, taxpayers should take notice — and grab their wallets.
The Internal Revenue Service’s “Direct File” program is a case study in duplication, waste, and mission creep.
Marketed as a “free,” government-run tool to help Americans file their taxes, it’s neither free nor needed. From a federal budget standpoint, it’s a disaster in the making—and from a governance standpoint, it hands the IRS far too much control over the financial lives of ordinary Americans.
As a former chief economist at the Office of Management and Budget, I’ve seen how these initiatives take root. They start with a small appropriation hidden deep in a spending bill and quietly metastasize into costly, permanent bureaucracies.
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The so-called Direct File “pilot program,” first launched during the Biden years, is following that same pattern.
During last year’s pilot program, fewer than 1% of eligible taxpayers even bothered to use the program. When a government service can’t attract more than a rounding error of participants despite massive taxpayer subsidies, that’s far from a success.
A Treasury Department Inspector General report found that taxpayers “did not like Direct File’s limited tax scope and its complexity.” 30 million taxpayers qualified for the program, 423,450 signed up, and yet only 140,803 ultimately submitted their returns through Direct File. That’s telling.
And yet, now, after the Trump administration made known its plan to scrap Direct File earlier this year, the IRS is gearing up to release a glowing anonymous feedback “survey” meant to show overwhelming public approval of the program. The approval to start such a survey was wedged into the Big, Beautiful Bill by congressional Democrats. But don’t be fooled: this survey will be as scientific as a high school popularity contest.
Users could take this survey as many times as they wanted, with no IP address verification, meaning one person could submit dozens—or even hundreds—of fake responses. AI bots could submit hundreds of thousands more. The survey’s design will conveniently ask whether users love the Direct File service, and no doubt, the IRS will make sure that satisfaction number looks very promising. But the results will mean nothing.
Again, at the end of the day, less than 1% of taxpayers used Direct File last year. That’s all the proof Congress should need that it’s underused, overpriced, and unnecessary.
Direct File costs roughly $814 per return processed last year — many times what private providers charge for equivalent services. If this were a private business, Direct File would have gone bankrupt by now.
Americans already have abundant options for no-charge or low-cost tax preparation and filing—including public-private partnerships like the IRS’s own Free File program, which has successfully connected millions of taxpayers with free, reliable filing tools for decades. Rather than improve and expand those existing partnerships, bureaucrats decided to build a duplicative system from scratch, using taxpayer dollars to compete with the private sector.
Taxpayers don’t want to use Direct File because they believe the IRS exists solely to collect taxes, not also to prepare our tax returns. Allowing the same agency that has every incentive to maximize its annual revenue collection to also determine what you owe on top of auditing you and enforcing payment would create a built-in conflict of interest. It would be the fiscal equivalent of letting the referee join one of the teams. The result would be a system that’s ripe for abuse, especially when the same agency has a history of targeting conservative nonprofit groups and mishandling sensitive taxpayer data.
At OMB, we asked one simple question about every program: Is this a core function of the federal government, or is it just more bureaucracy? It’s clear that Direct File falls in the latter camp. From backlogged returns to unanswered customer service calls to cybersecurity lapses, the IRS already struggles to manage its existing workload — and now it’s diverting resources toward a politically-motivated vanity project.
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Congress should ignore the demands of unelected IRS bureaucrats and stop Direct File in its tracks. Every dollar spent on the program is a dollar not for reducing the deficit, modernizing IRS systems, or strengthening taxpayer privacy protections.
President Donald Trump promised to restore accountability and fiscal restraint to Washington. Ending wasteful, duplicative programs like Direct File is a fantastic place to start. Because when the IRS becomes both tax preparer and tax collector, it’s strengthening The Swamp, not draining it. And that’s in no one’s interest.
Vance Ginn is the host of the Let People Prosper Show and a staff economist at Americans for Tax Reform. He is formerly chief economist of the first Trump White House’s Office of Management and Budget. Follow him on X at @VanceGinn.
