Direct File, a free tax filing tool by the IRS that serves 25 states, is facing potential cuts after pressures from tax software lobbyists. CEO Sam Corcos suggested eliminating the service to Treasury Secretary Scott Bessent, despite having previously praised it to IRS engineers. The tool is expected to remain available through the 2025 filing season, but its future looks bleak. The reassurances given by DOGE leaders about the tool's safety were contradicted by later decisions that came as a surprise, indicating a shift in agency priorities.
The plans to potentially kill Direct File, the free tax filing tool developed by the IRS which services 25 states, were initiated by Sam Corcos, CEO of a health startup with ties to SpaceX. His suggestion to cut the popular service was presented to Treasury Secretary Scott Bessent in early March, demonstrating a sudden shift in priorities that contradicted previous reassurances given to the IRS team.
Despite initial support for Direct File by the DOGE leadership, the tone shifted drastically after interactions with tax software lobbyists. The decision to potentially eliminate Direct File seemed unexpected to many involved, marking a significant pivot in the IRS's approach towards free tax filing services.
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