In November 2025, Treasury Secretary Scott Bessent — who is also serving as the current IRS commissioner — confirmed the decision to end the federal Direct File tax-filing system. He said there are “better alternatives” available to taxpayers. The announcement closes a chapter on a government-run online filing option and raises immediate questions about where people will now turn to prepare and file their taxes.
What Direct File was and why its end matters
Direct File was designed as a free online system that let taxpayers prepare and submit federal returns directly to the IRS without going through commercial software or paid preparers. For many, it promised a straightforward, no-cost option aligned with public-service goals: reducing barriers to filing and protecting consumer choice.
With the program being discontinued, millions of filers — especially those who preferred a free, government-backed route — will need to evaluate other options. The shift also reopens the policy debate over access, cost, data privacy, and how government supports simpler tax filing for low- and moderate-income households.
What Secretary Bessent meant by “better alternatives”
Bessent’s statement suggests the Treasury and IRS believe other channels can meet taxpayer needs more effectively. That could include a mix of public and private services that offer user-friendly interfaces, stronger security measures, wider feature sets, or broader outreach to underserved communities.
Exactly which models the Treasury favors will affect how accessible and affordable tax filing is going forward. Policymakers will need to explain how alternatives will preserve free access for those who need it and maintain strong consumer protections.
Common alternatives available to taxpayers
- Commercial tax software — Many taxpayers use private online platforms that guide users through return preparation with step-by-step prompts. These often include helpful features like error checks, import of W-2s, and audit support. However, costs can vary and many vendors charge for state returns or more complex forms.
- IRS Free File program — A public-private partnership that pairs the IRS with commercial vendors to provide free electronic filing for eligible taxpayers. Its availability and terms have changed over time, so filers should check eligibility each year.
- Paid preparers and accountants — Professional preparers can handle complex tax situations and offer personalized advice. They add the benefit of expert review but come with higher costs.
- Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) — Free in-person or virtual help for low-income taxpayers, seniors, and people with disabilities. These programs fill an important gap for those who need assistance but may not be comfortable with online tools.
- State-run filing options — Some states run their own filing portals or partner with vendors to offer free state returns. Availability varies by state.
How to choose the right filing option
With Direct File gone, taxpayers should weigh a few key factors when selecting a filing route:
- Cost: Look for upfront fee disclosures. Some platforms advertise free filing but charge for add-ons or state returns.
- Complexity of your return: Simple returns may be fine with basic online tools, while business owners, investors, or people with multiple income streams may need professional help.
- Data privacy and security: Check how providers store and protect your personal data. Government and reputable private vendors generally follow strict security practices.
- Support options: Find out whether help is available by phone, chat, or in person if you get stuck or receive an IRS notice later.
- Eligibility for free programs: If you qualify for VITA, TCE, or IRS Free File, those can be solid cost-free choices.
Practical steps for taxpayers this filing season
- Gather and organize documents early: W-2s, 1099s, receipts, and records of deductions make filing smoother.
- Compare providers: Review fees, features, and customer reviews before starting your return.
- Beware of scams: Phishing attempts and fake filing sites increase during tax season. Always verify you are on a legitimate portal before entering personal information.
- Keep copies: Save electronic or printed copies of your filed return and confirmation of submission.
- Use direct deposit: If you expect a refund, direct deposit is faster and more secure than a mailed check.
- Seek free help if eligible: Call local VITA/TCE centers or check IRS guidance about volunteer programs.
Policy implications and what to watch next
The end of Direct File will prompt scrutiny from lawmakers, consumer advocates, and community organizations. Key issues to watch:
- Access and equity: Will alternative programs ensure free and easy filing for low-income taxpayers and people with limited digital access?
- Transparency: How will the Treasury and IRS monitor the effectiveness and fairness of alternative options?
- Data protections: With private companies handling more filings, regulators may press for stronger privacy and security standards.
- Transition details: Timely guidance is essential so taxpayers know where to go and how to prepare for the change.
Looking ahead
For now, taxpayers should focus on understanding their choices and preparing their documents. Officials have signaled confidence that better options exist, but the practical impact will depend on how well those alternatives are communicated and implemented. Watch for guidance from the Treasury and IRS about enrollment deadlines, eligible programs, and resources for people who need extra help filing their returns.