In 2024, the US Internal Revenue Service piloted its “Direct File” program, through which its victims — American taxpayers — in some states could complete tax returns online directly with the IRS rather than through third party tax preparation services. In 2025, the program expanded to 50 states and millions of Americans saved themselves a little money.
Spare taxpayers the cost of paying private sector professionals to navigate complicated government paperwork? Seems like the least the government can do, right?
Enter the “Department of Government Efficiency” and lobbyists for the “Free File Alliance,” a tax preparation industry group that provides supposedly free tax services in “public-private partnerships” with the government.
While Direct File hasn’t actually been eliminated yet, the “Big Beautiful Bill” signed by president Donald Trump on July 4 directs the IRS (per DOGE recommendation) to find a replacement for it by returning to those aforementioned “public-private partnerships.”
Why do commercial tax preparers want to do your taxes for free? They don’t, as many taxpayers quickly learn. If your tax return is more complicated than the old “1040-EZ,” chances are you’ll have to cough up. The “free” claim is just clickbait to get you in the door.
According to the National Taxpayers Union, Americans will spend nearly $150 billion dollars on tax preparation this year — not counting the value of the 7.1 billion hours they’ll put into the affair even with that professional help (your bit of that money and time is already gone unless you own a business and/or do quarterly filing).
If you have to ask why, the answer is usually “money.” And that’s the answer here. Direct File threatens to derail a $150 billion gravy train. “Tax professionals” are more than willing to spend a little on lobbying (let’s speak plain English: “Bribing politicians”) to keep said train on the rails and moving at full speed.
So, I have an alternative proposal to offer, because of course I do.
Two alternative proposals, actually.
The first one is “eliminate the federal income tax.”
No dice? OK, how about this:
A 100%, “refundable,” tax credit for all payments to tax preparation services, plus $94.25 (the federal minimum wage of $7.50 per hour for the 13 hours the average American spends on the process).
No, not a deduction from your “gross adjusted income,” especially not a deduction that only applies if your TOTAL deductions exceed the “standard deduction” amount.
A direct deduction from your tax BILL, with payment to you if your costs exceed the amount the IRS pretends you “owe.”
Tax preparation costs are really taxes themselves — government just has you pay them to its “public-private partners” instead of to the IRS. Therefore they should be deducted from the total bill, right?
Implement that and see how quickly “Direct File” returns.
Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.
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