You Could Have Filed Your Taxes for Free This Year…

In 2024, Joe Biden’s administration piloted Direct File, a free tax filing program offered by the Internal Revenue Service to save taxpayers time and money.

More than 140,000 taxpayers participated, and a subsequent audit by the Government Accountability Office praised the initiative for its design and accuracy. Users liked the program too, with 84 percent of filers in one survey saying they were “very satisfied.” The IRS projected that 32 million Americans could benefit if Direct File were fully implemented. The average taxpayer would also save as much as $160 in tax prep fees, according to the Economic Security Project.

So naturally, Donald Trump’s administration killed it.

Though Direct File was technically available for the 2025 tax season, Elon Musk’s DOGE “deleted” the IRS team working on the program last March. The IRS announced its official closure last November. (A visit to its former webpage returns the error message, “Server not found.”) To justify the move, Trump’s Treasury Department released a report complaining of Direct File’s “low overall participation and relatively high costs and burdens on the federal government.”

An audit released by the Treasury Department’s Inspector General last month, however, found that low participation last year was due to “confusion in media coverage about availability and a lack of outreach.” The IRS also only spent about $16.2 million on the program for fiscal year 2025—just a little more than the $15 million set aside in the “One Big Beautiful Bill” to produce the Treasury’s report. The administration essentially sabotaged Direct File, then called it a failure.

The tax prep industry, though, would call that a win.

Thanks to the tax code’s complexity, most Americans pay to file their taxes. That means big money for the tax prep industry, valued at $14.2 billion in 2024. Since tax time is the only reason these companies exist, initiatives like Direct File posed an existential threat to them. In fact, H&R Block’s 2025 annual report warns investors that “offers of free services and products could adversely affect our revenues and profitability.” (The company reported revenues of $3.8 billion in fiscal year 2025.)

The industry has long opposed efforts to simplify the tax code or to expand free filing services, and it launched a fierce campaign to end Direct File. In 2025, Intuit and H&R Block spent a record $7 million on lobbying costs, according to OpenSecrets. As a result, a group of Republican lawmakers sent a letter to Trump opposing Direct File, while Sen. Marsha Blackburn filed legislation to end the program.

With the amount of money at stake, the last thing the tax prep industry wanted was better, cheaper ways for Americans to file their taxes. The Trump administration was apparently all too happy to oblige—at taxpayer expense.

The fees that the tax prep industry collects take a hefty chunk out of people’s refunds, especially among low-income households. If you itemize, the cheapest version of Turbo Tax is $139, while the base price for H&R Block is $99 (In each case, filing state returns is extra).

If going to H&R Block costs $174 (the base price plus $75 for one state return), a taxpayer receiving last year’s average refund of $3,170 would lose 5.5 percent of that refund in fees. Many taxpayers spend far more, especially if they opt for expensive financial products like “refund anticipation loans”—which work exactly like payday loans. Taxpayers borrow against their expected refunds, and the loans get repaid—along with fees—when the IRS cuts a check.

Companies also often offer “refund transfer” services for people without bank accounts. The company creates a temporary bank account (for a fee) where the IRS can direct deposit a taxpayer’s refund and from which the company deducts the cost of tax prep. At H&R Block, remaining balances can be loaded onto an “Emerald Prepaid Mastercard,” which also charges a variety of fees, including a $9.95 monthly “inactivity” fee for dormant accounts. In fiscal 2025, H&R Block reported earning $239 million in fees from its refund transfers and financial products.

Low-income taxpayers are often highly vulnerable to predatory tax time products, especially if they’re eligible for the Earned Income Tax Credit. EITC refunds are often sizable—the average refund was $2,894 in 2024—which makes them especially tempting targets for tax preparers looking to skim their share. (Read more about these tactics here, and if you really want a deep dive, read my book.)

The Trump administration has spent a lot of time this week boasting about the size of the refunds taxpayers are getting this year. But if it really cared about taxpayers, it wouldn’t have ended the one thing the IRS has done in recent years to make tax time more bearable.

New at the Monthly…

Being JD. How much does it suck to be JD Vance right now? Just in the last two weeks, he’s failed to end a war he allegedly never wanted, he got shipped to Hungary to prop up a strongman who was crushed in the polls by voters, and he’s been forced to defend Trump’s outrageous attacks on the pope. Perhaps it’s just desserts for serving a boss who demands absolute loyalty but offers none in return: Vance was doomed to fail. “We have no reason to believe Trump cares about what happens to other people and institutions once he leaves the political stage,” writes Politics Editor Bill Scher. Bill also points out that Vance should have learned a thing or two from the experience of Trump’s first VP, Mike Pence. Read here.

Reason for hope. There’s increasing reason to believe that “MAGA is not the wave of the future,” contributing editor Jonathan Alter writes. Jon points to three optimistic developments: (1) the recent elections in Hungary that pushed out autocrat and Trump idol Viktor Orbán; (2) the successful Artemis II mission, which showed the greatness that Americans working together can achieve; and (3) the courage of Pope Leo as the world’s conscience. Read here.

How Orbánization backfired. Like a certain other leader hopes to do, Hungary’s Viktor Orbán relied on tactics like extreme gerrymandering to preserve his party’s electoral majority. It worked—until it didn’t, writes Steven Hill, chief editor of DemocracySOS. Steven argues that Orbán’s electoral bulwark was surprisingly fragile in the face of a unified and resolute opposition. Republicans should take note. Read here.

Man versus machine. The liberal arts have recently been derided for their lack of “return on investment,” but the advent of AI should spark a renaissance, argues higher education expert Ben Wildavsky. Why? Because a liberal arts education teaches the one skill AI doesn’t have and that students will need to navigate an AI-driven world effectively—the ability to think. “This centuries-old educational tradition is precisely what they will need to thrive, personally and professionally, in the age of AI,” Ben writes. Read here.

Supreme conundrum. Many LGBT-rights advocates may have been surprised by the Supreme Court’s 8-1 ruling to reject Colorado’s ban on “conversion therapy” for LGBT minors. Justices Sonia Sotomayor and Elena Kagan sided with the conservative majority, while Justice Ketanji Brown Jackson was the sole dissenter. Alison Gash, a professor at the University of Oregon, argues that this wasn’t an instance of liberal justices shifting rightward. Rather, she writes, this might have been a strategic decision on their part, to preserve therapists’ rights as litigation returns to the lower courts. Alison explains here.

Plus…

• Contributing Writer and Publisher Emeritus Markos Kounalakis points out the hypocrisy inherent in Melania Trump’s bizarre press conference about her alleged non-relationship with the late trafficker Jeffrey Epstein.
• Merrill Goozner critiques the Center for American Progress’s health-care plan as too complex and incremental. He proposes something bolder: caps on out-of-pocket spending and “all-payer” rate-etting.
• James Zirin, a former federal prosecutor and Monthly contributor, reviews a new documentary about the trial of Joan Little, a Black woman whose murder trial in 1975 raised pivotal questions about racism in the justice system. James also critiques the planned abomination known as the “Arc de Tromp.”
• Bill Scher writes about the dilemma facing Democratic primary voters in Maine, who have their choice of two flawed candidates.

Coda (mind control edition) …

As much as I’d like to share Jon Alter’s optimism, I can’t help but notice the little and not-so-little victories the Trump administration is still enjoying because of its relentless ideological onslaught.

Vaccine denialism is gaining. A new Politico survey finds that more Americans distrust vaccines than trust them. Forty-six percent of Americans—including 36 percent of those who voted for Kamala Harris—say that the “facts on vaccines are still up for debate and it is damaging to enforce their uptake.”

Academic censors are winning. The Texas A&M professor who fought a ban on teaching Plato gave up last week and quit. In his resignation letter, philosophy professor Martin Petersen decried the Texas Board of Regents’ “censorship” and declared that “no other serious research university maintains a policy on ‘prohibited instruction.’” Under the University of Texas System’s new policies against “race and gender ideology,” Petersen’s selections from the Symposium were verboten for their discussion of homosexuality. The biggest irony here is that Plato wasn’t exactly a fan of democracy himself (although what he envisions was a benevolent “philosopher king,” not the Texas Board of Regents).

Anti-abortion protests are the new January 6. This week, the Department of Justice fired at least four attorneys who prosecuted anti-abortion protesters accused of violence or blocking clinic access in violation of federal law. The DOJ also released a report this week alleging that these “peaceful” protesters had been targeted for their religious beliefs. This is the first in what is likely to be a series of reports on the alleged “weaponization” of the DOJ under Biden. Again, the irony.

As always, thanks for reading, and don’t forget to share, like, and subscribe. Have a great week!

Anne Kim, Senior Editor