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The Internal Revenue Service (IRS) has confirmed that its experimental free tax filing service, Direct File, will not be available for the upcoming 2026 tax season. This decision, communicated to 25 states that participated in the program, casts a shadow over the future of government-provided online tax preparation options for American taxpayers.
In an email obtained by Nextgov/FCW and verified by multiple sources, the IRS thanked the collaborating states but noted, “IRS Direct File will not be available in Filing Season 2026,” adding that “no launch date has been set for the future.” This official notification follows earlier reports and remarks from former tax officials hinting at the program’s cessation.
A Brief History of Direct File
Direct File, which launched in 2024, represented a significant departure from decades of IRS policy. Previously, the agency avoided direct competition with the commercial tax preparation industry by not offering its own online filing service. Despite this, the program garnered considerable positive feedback from its users. In 2024 and 2025, hundreds of thousands of taxpayers utilized Direct File, giving it notably high marks for ease of use and accessibility.
The service allowed over 296,500 users to file their taxes directly with the IRS without charge. However, the program faced strong opposition from various quarters, including several Republican lawmakers and influential tax preparation companies, which actively lobbied against the government’s foray into this space.
Shift Towards Public-Private Partnerships
With Direct File on indefinite hold, the IRS appears to be returning its focus to existing public-private models. A major tax and spending policy bill signed into law by the Trump administration over the summer mandated the IRS establish a task force. This group is tasked with exploring how the tax agency can leverage partnerships with private entities to potentially replace services like Direct File.
For decades, the IRS has relied on the Free File program, a public-private partnership designed to offer free tax filing options to most Americans. However, Free File has been heavily underutilized, with only about 3% of eligible taxpayers using it in recent years. Critics have also pointed out instances where participating companies allegedly steered users toward paid products, even when free options were available.
Reactions and Future Implications
The suspension of Direct File has drawn sharp criticism from advocates for free government tax services. Adam Ruben, Vice President of the Economic Security Project, expressed his disappointment to Nextgov/FCW, stating, “It’s not surprising since the Trump administration sabotaged Direct File all through this year’s filing season, at the urging of tax prep monopolies like TurboTax.” He added, “Trump’s billionaire friends get favors while honest hardworking Americans will pay more to file their taxes.”
Senator Elizabeth Warren (D-Mass.) also weighed in, telling Nextgov/FCW that “the fight isn’t over.” She lamented the situation, observing that “giant tax prep companies are popping champagne, while Americans are forced to spend more time and more money to file their taxes.”
As the 2026 tax season approaches, taxpayers who relied on Direct File will need to explore alternative filing methods. The IRS has advised former Direct File users needing tax transcripts to access them through their existing IRS online accounts. The agency has not yet responded to requests for comment regarding the program’s future beyond 2026.