In addition to showering rich Americans and large corporations with more tax breaks, legislation that Republicans advanced out of committee on Wednesday would officially eliminate the Internal Revenue Service's popular and free Direct File program, which allowed eligible taxpayers to sidestep private prep companies that have lobbied relentlessly against government-offered alternatives for decades.
The tax legislation that the GOP-controlled House Ways and Means Committee approved in a party-line vote contains an underlooked provision that requires the U.S. Treasury Department to "ensure that the Internal Revenue Service Direct File program has been terminated."
The bill also opens the door to a "partnership between the IRS and private-sector tax preparation services to provide for free tax filing" to replace Direct File, which has been in the crosshairs of the Trump administration and the Elon Musk-led Department of Government Efficiency.
Watchdogs said the measure's language reeks of corporate influence.
"Corporate monopolist Intuit spent millions lobbying Republicans to insulate TurboTax from competition," said Hannah Garden Monheit, a senior fellow at the American Economic Liberties Project. "Now, House Republicans are doing Intuit's bidding by killing the Direct File program, which provided free, simplified public tax filing software beloved by its users."
"Direct File saves the average American $160 in filing fees and hours of time each year, and continuing it would save $11 billion annually," she added. "Expanding and improving Direct File should've been an easy win for DOGE, but clearly corporate cronyism is more important to Republicans than lowering costs for ordinary Americans and increasing the efficiency of government services."
"Trump will force you to fork out hundreds of dollars each year to TurboTax so he can give tax breaks to billionaires."
Direct File, which began as a pilot program during the 2024 tax filing season, threatened the dominance of Intuit and H&R Block, corporate giants that control the private tax preparation space and have been accused of engaging in deceptive marketing practices—particularly in their promotion of "free" services.
A report published earlier this year by the consumer advocacy group Public Citizen noted that both companies have donated heavily to Republican lawmakers, including members of the House Ways and Means Committee.
Late last year, dozens of House Republicans signed a letter urging the then-incoming Trump administration to eliminate the Direct File program. Letter signatories had received $1.8 million in campaign contributions from corporate interests opposing Direct File, including lobbyists for the private tax prep industry, according to Public Citizen.
"During the 2024 cycle, 19 of the Republican signers received a PAC contribution from either H&R Block or Intuit," Public Citizen found. "One of the letter's drafters, Rep. Adrian Smith (R-Neb.), received a PAC contribution from both companies."
The tax prep industry has also recently ramped up its lobbying efforts. NOTUSreported last month that "Intuit spent $3.7 million on federal lobbying in 2024, more money than it has ever spent on federal lobbying in a single year."
Sen. Ron Wyden (D-Ore.), the ranking member of the Senate Finance Committee, called Republicans' push to terminate Direct File "an under-the-radar" part of their tax plan.
"Trump will force you to fork out hundreds of dollars each year to TurboTax so he can give tax breaks to billionaires," Wyden wrote Wednesday.