[Congressional Record Volume 172, Number 66 (Wednesday, April 15, 2026)]
[Senate]
[Pages S1770-S1772]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DIRECT FILE ACT
Mr. BLUMENTHAL. Mr. President, I am here on tax day to highlight how
the Trump administration has made filing taxes more costly, more
complicated, and more time-consuming for working Americans. Nobody
likes paying taxes. It is painful, but this administration somehow has
managed to make it even more painful. From eliminating a free, easy-to-
use tax service program to cutting funding and staff at the Internal
Revenue Service, the Trump administration has made it needlessly harder
for millions of Americans to meet their tax obligations this season.
On tax day, we recognize there is an obligation. Most Americans
fulfill it. But, at the very least, the government can make it less
painful, not more so. But, in late 2025, at the behest of giant tax
preparation companies like TurboTax and H&R Block, President Trump
canceled the popular Direct File Program. That was a free online
service that allowed taxpayers to file their Federal income taxes
directly with the IRS.
By every measure, believe it or not, this government program was a
runaway success. It received overwhelmingly favorable reviews.
Remember, this is a service enabling people to pay taxes, and people
loved it. Ninety percent of survey respondents ranked their experience
as ``excellent'' or ``above average.'' It was estimated to save the
average taxpayer $160 and hours of their time.
In short, this program worked. No more third-party companies nickel-
and-diming taxpayers with expensive rates and junk fees. It was just
straightforward, no cost, an option that hundreds and thousands of
families relied on to pay their taxes.
And studies projected that a full-scale, permanent Direct File
Program would have saved Americans $11 billion annually in combined
filing fees and time costs.
The Direct File Program also helped lower income families because
they were able to access millions of dollars in unclaimed tax credits,
with projections suggesting it would have delivered up to $12 billion
in additional tax credits annually. That is a lot of money. As costs
increase for everything--food, housing, healthcare--this program was an
easy way to give working Americans a well-deserved break.
But the Trump administration canceled the program. It caved to the
tax software companies, and, yet again, it put profits over people.
Frankly, this is just stupid. It is dumb. It is crazy, if you consider
the public interest.
Americans are required to pay taxes. So the Federal Government should
have an easy way for them to do it, and I am proud to have introduced
the Direct File Act with my colleagues. Our bill would reinstate the
Direct File Program and prohibit the IRS from entering into agreements
that restrict its ability to provide these free services.
Sadly and unforgivably, Republicans are opposing the Direct File Act.
I guess, instead, they are cozying up to the Big Tech companies and
putting corporate interests above those of everyday Americans. You
would think, in this kind of issue, we would have common ground. It is
an easy issue.
And taxpayers deserve better from the IRS. They need an Agency that
is fully staffed, adequately resourced, and capable of delivering
timely, reliable service, including refunds.
A lot of people say: Oh, well, the IRS. We hate the IRS.
Well, you hate the IRS until you are owed a refund or until the IRS
makes a mistake because they are understaffed or because they don't
have modern technology that could save all of us money.
And that is why I recently sent a letter to the IRS, urging them to
take immediate steps to ensure it is fully prepared to meet American
taxpayer needs during this 2026 filing season.
President Trump seems to be on a mission to make life more difficult
and more expensive for Americans, and he seems to be succeeding.
Eliminating the Direct File Program, as well as cutting funding and
reducing staffing at the IRS, is simply increasing costs and making the
system more difficult, more painful, more onerous for all taxpayers--
maybe except for the millionaires and billionaires who can well afford
their accountants and wouldn't use the Direct File Program. But for
most of the people of America who want to pay their taxes and do it, it
simply imposes an additional unnecessary burden.
I yield the floor.
The PRESIDING OFFICER. The Senator from Massachusetts.
Unanimous Consent Request--S. 3948
Ms. WARREN. Mr. President, I want to say thank you to my partner in
these efforts, Senator Blumenthal, and to all the others who have come
here to speak on tax day about how outrageous it is that a program to
actually let people pay their taxes online for free has been destroyed
by Donald Trump and the Republicans.
So I am about to call up a bill to the floor that would let Americans
file their taxes for free directly with the IRS. It is amazing to me
that anyone could oppose this, especially when filing your taxes is
something that Americans are required by law to do every year. But as
sure as the Sun will rise, Republicans are going to block my bill.
For years, giant tax prep companies like TurboTax and H&R Block have
rigged our system so they can cash in on your hard-earned dollars, and
the result is that people spend now an average of 8 hours and $160 each
year just to file their taxes using tax prep services.
These big companies don't just take a fee for filing your taxes; they
have actually become experts at figuring out ways to upsell, to charge
junk fees, and to make money off your personal information. It is
really outrageous.
So I drafted a bill that would allow Americans to file their taxes
online for free and directly with the IRS through a program called
Direct File.
Now, tens of millions of people wouldn't have to go to a paid
preparer if they didn't want to. They could just file directly with the
IRS.
Over 160 Members of Congress have joined me on this bill. Over 100
unions
[[Page S1771]]
and advocacy groups and national organizations have endorsed this bill.
And I am forcing the Senate to decide today: Will we pass this bill?
During the Biden administration, the IRS ran a pilot program for
Direct File. People who had a chance to use it loved it. Ninety-four
percent of taxpayers who used the program described their experience as
``excellent'' or ``above average,'' which, by the way, is not exactly
how most Americans describe paying their taxes most of the time. But
Direct File worked. We have seen it. We actually made it work.
And once it was fully operational, Direct File was projected to save
taxpayers $23 billion a year and more hours than anyone could count.
So why do we not have Direct File today? We already had it. We set it
up during the Biden years, ready to go, and had it underway. It was
working. Well, the answer is tax prep companies hated it, and they
hated it because it cut into their bottom line.
Why would people pay for TurboTax if they could easily file their
taxes online for free?
And that is why, for years, big tax prep companies have lobbied the
government to keep people from using a program like Direct File.
Now, the Direct File pilot project was a huge success, and yet it was
dropped. Why? Well, first, the company that runs TurboTax, Intuit,
donated a million dollars to Donald Trump's inauguration. And then, a
few months later, reports came out that Donald Trump and Elon Musk
wanted to kill the free tax filing program. And last fall, they
delivered. That is exactly what they did.
This story tells you everything you need to know about why
Republicans will block my bill today. This is all about money and
power. It is about letting big corporations donate to politicians and
then politicians just opening the doors so those big companies can rip
off the American people.
To Republicans who say that making filing your tax for free with the
IRS is too expensive, I just want to point out that for one day of
bombing in Iran, we could pay for 20 years of Direct File.
And to Republicans who say that it is already free to file your
taxes, I say: Go talk to the millions of people who paid over 100 bucks
to file their taxes this year and ask them just how free it was, even
when they click on the ``free'' buttons, and how it is that these guys
have managed to put them in places where they end up paying.
And to the Republicans defending the status quo, just ask yourselves:
Why are you on the side of TurboTax and H&R Block, instead of your
constituents?
Filing your taxes should be easy and free, and I urge every Senator
to vote yes on the Direct File Act. Let's save people some time and
some money and show the American people that we can actually make
government work not just for giant corporations, but we can make
government work for them.
Mr. President, I ask unanimous consent that the Committee on Finance
be discharged and the Senate proceed to the immediate consideration of
S. 3948; that the bill be considered read a third time and passed; and
that the motion to reconsider be considered made and laid upon the
table.
The PRESIDING OFFICER. Is there an objection?
The Senator from Idaho.
Mr. CRAPO. Mr. President, reserving the right to object, I rise in
opposition to S. 3948, the Direct File Act of 2026.
After listening to those who have described why we need it, you might
say: Well, how could there be a different story or another side of the
coin?
I will tell you. There is a huge disagreement about the facts, and
there is a huge disagreement about what has happened, and there is
another side of the coin.
This bill seeks to reverse the Treasury Department's recent
suspension of the Direct File Program. Direct File was an unauthorized,
unnecessary program that wasted taxpayer funds and presented a clear
conflict of interest by empowering the IRS to be not only the evaluator
of tax returns and the enforcer of tax returns but the preparer of tax
returns, empowering the IRS to prepare tax returns for the same
taxpayers that it was later going to audit.
And, by the way, when that did happen with some of these taxpayers,
they were successfully audited by the IRS for errors in their returns.
As part of the Biden administration's so-called Inflation Reduction
Act, congressional Democrats provided the IRS with $15 million to study
the feasibility of providing a new, direct e-file program. On the same
day that the study was due to Congress, the Biden administration
announced the launch of a limited pilot Direct File Program. This so-
called pilot program quickly expanded, spending tens of millions of
dollars, despite the narrow mandate provided by Congress.
As part of the Working Families Tax Cut Act, Congress further
directed the Treasury Department to evaluate and study alternatives to
direct file.
Treasury's subsequent October 2025 report found significant concerns
with the Biden administration program, warranting its suspension.
What were those concerns? In its report, the Treasury found that the
Direct File Program accounted for just two-tenths of 1 percent--get
that--0.2 percent of the 146 million tax returns filed in the year
2024.
Yet despite its small footprint, Direct File cost taxpayers at least
$41 million to administer. That is $138 per return in 2024 and nearly
three times the total funding authorized by Congress. Alarmingly, the
Treasury acknowledged that these figures likely underestimate the true
cost of the Direct File Program with the IRS failing to include costs
for employee support, online services, and submission processing--among
others.
A later report from the nonpartisan Treasury Inspector General for
Tax Administration further confirmed that Direct File had poor
performance. Contrary to what you had been told, that everyone loved
it, it had poor performance.
The Treasury Inspector General for Tax Administration report found
that nearly 60 percent of the registered users abandoned their return
before they even filed it, meaning that less than half of the
registered users even ended up using Direct File to submit a return.
The Treasury Inspector General for Tax Administration also estimated
that over 3,000 returns were filed with preventable errors burdening
taxpayers and delaying refunds.
There are actually free file options available. This notion that this
is TurboTax and H&R Block trying to divert people into its system is
simply false. Ultimately, the Democrats' Direct File experiment
demonstrates that the IRS can better serve taxpayers by highlighting
existing free filing options and improving basic customer service
rather than diverting a growing share of its resources and attention to
redundant, expensive government-run programs.
Now, what do I mean when I say there are alternatives? Looking at the
last year when Direct File was operational, it processed 296,531
accepted returns out of 160 million total filings. That is the .2
percent number.
There are multiple options available to almost all U.S. taxpayers to
be eligible to use programs like IRS Free File, a public-private
partnership that has no cost. In the same year that 296,000 people used
Free File, after I think--I don't know if that number is before or
after 60 percent of them declined to stay in the program--Free File
filed 1.9 million returns for those who wanted to do it--a public-
private partnership.
In addition, there is a group called the Volunteer Income Tax
Assistance Program and the Tax Counseling for the Elderly Program--both
of which provide free, in-person preparation at thousands of locations
nationwide. And these two programs themselves prepared approximately
2.7 million more tax returns for free for people in 2024, vastly
exceeding Direct File's reach at a fraction of the cost.
The myth is that people have to go pay money to get their tax returns
prepared, when the reality is there are multiple private sector and
private-public partnerships that are available for almost all Americans
to have their tax returns prepared for free.
Ultimately, the Democrats' Direct File experiment demonstrates that
the IRS can better serve taxpayers by highlighting existing free filing
tax options and improving its own basic customer service, which it did
this year, rather than diverting a growing share of its resources and
attention to a redundant, expensive government-run program. Therefore,
Mr. President, I object.
[[Page S1772]]
The PRESIDING OFFICER. The objection is heard.
The Senator from Massachusetts.
Ms. WARREN. Mr. President, I truly am shocked to hear my colleague
from across the aisle describe Direct File as too expensive for the
American people. I think he said it cost $41 million to administer this
system. If it is fully operational, Direct File is projected to save
taxpayers $23 billion a year and countless hours of hassle. There are
very few things that happen here in Washington that give such a good
return on investment to taxpayers.
Senator Crapo said that people didn't use Direct File and suggested
they didn't like it somehow. You know why people didn't use Direct File
last year with the Republicans in charge? Maybe it was because the
Trump administration and the Republicans accepted millions of dollars
from the tax prep companies and did their best to sabotage the program.
Here is what we know for sure: Polling shows that over 75 percent of
Americans support free tax online filing from the IRS. If you invest in
free tax filing, Americans are going to use it.
In fact, we know that because in the pilot project run by the Biden
administration, 94 percent of those who used the program said it was
excellent or above average. Not usually the kind of responses we get
from people when they are paying their taxes.
The argument that Republicans make that Americans can already file
their taxes for free with Free File, all I will say is: Well, tell that
to the millions of people who paid more than a hundred bucks each to
file their taxes this year. Independent watchdogs have concluded over
and over and over again that the tax prep companies that run Free File
make it incredibly hard for people to find it; and, once they find it,
incredibly hard for them to use it. So what do people do? They end up
paying through the nose just to file their taxes.
And you know who never got charged to file their taxes? The people
who used Direct File. Direct File is the only truly free online filing
option for Americans.
You know, the Republicans have argued that it presents conflict of
interest for the IRS to both prepare and audit your taxes. I think
somehow they seem to misunderstand how Direct File works. People who
use Direct File are the ones preparing their own taxes, not the IRS--
just like the people who use TurboTax are the ones using a program to
prepare their own taxes.
And you know what happened when people used Direct File to prepare
their taxes? Their returns got accepted at a higher rate than any other
self-prep software--that is, it worked better than TurboTax; it worked
better than the services that Americans are paying for.
Look, we know what is going on here, and that is that the Trump
administration and the Republicans are accepting millions of dollars in
donations--a point that was not refuted by the objector to this bill.
They are accepting millions of dollars in donations from these tax prep
companies; and then in return for that money, shutting down Direct
File. That is where the real conflict of interest is.
Look, we have a choice to make as a U.S. Senate, and that is: Who are
we here for? Why are we here to protect two multibillion-dollar
companies that manage to make big bucks by charging individual families
$100, $150, $175 just to pay the taxes that they are legally required
to pay?
We have a system that works. It would save people billions of dollars
across this country. The only reason that we are not doing this is
because the tax prep companies have figured out that making political
contributions to the Republicans pays off big time. They can kill off a
program that would be good for the American people but would hurt their
own profitability.
You have got to make a decision: Whose side are you on? The Democrats
are on the side of saving money for American taxpayers. The Republicans
are on the side of two big tax prep companies because they get paid to
be on their side.
So we may not get this one through today, but we will keep coming
back.
I yield the floor.
The PRESIDING OFFICER. The Senator from Louisiana.
____________________