IRS makes free tax return program permanent and is asking all states to join in 2025

WASHINGTON — The IRS said Thursday it will make permanent the free electronic tax return filing system that it experimented with this year and is asking all 50 states and the District of Columbia to help taxpayers file their returns through the program in 2025. “And an early decision on 2025 is critical for planning -– both for the IRS and for additional states to join the program.” The IRS has face intense blowback to Direct File from private tax preparation companies that have made billions from charging people to use their software and have spent millions lobbying Congress. David Ransom, a spokesman for the right-leaning American Coalition for Taxpayer Rights, said the Direct File program was “unnecessary” because there already are free filing options available. Adam Ruben, a vice president at the left-leaning Economic Security Project said his organization is “already working with our partners in states across the nation to support the expansion of Direct File next year so more taxpayers can take advantage of free and simplified tax filing in the next tax season.” For the Direct File program to keep growing, it will need continued funding under the Inflation Reduction Act, which initially included $80 billion for the IRS.