The IRS has discontinued its free online filing system, Direct File, after two tax seasons. The program allowed users in 25 states to file federal tax returns online for free directly with the government. Republicans pushed to eliminate Direct File due to low participation and high costs, claiming the private sector can do better.
The IRS suspended Direct File following an October report, stating the private sector can provide better services. Tax preparation companies saw Direct File as a threat to their business model. Ending the program leaves taxpayers without a free, easy option to file directly with the IRS.
Direct File saved users an average of $160 in filing fees. The decision to end the program is estimated to cost American taxpayers $23 billion annually. Despite positive reviews, the program wasn’t widely used this year due to lack of promotion.
Consumers impacted by Trump’s tax and spending law should budget more time for filing taxes. Free nonprofit tax preparation services are available, but watch out for hidden fees. It’s important to closely monitor the service used to file taxes for transparency on costs.
Read more at Yahoo Finance: The IRS’ free direct online tax filing tool is being eliminated. Here’s what you need to know.
