Concerns rise as Elon Musk claims shutdown of IRS Direct File team

Tesla and SpaceX CEO Elon Musk, who was recently appointed as a special government employee by President Donald Trump, announced that he had cut the staff overseeing the IRS Direct File programme, a system designed to allow Americans to file taxes for free online.

Musk made the announcement on his social media platform X (formerly Twitter), stating that he had "deleted" 18F, a government technology agency responsible for multiple digital projects, including the IRS’ Direct File programme.

His statement sparked confusion over the future of the free tax filing system, although the IRS has confirmed that Direct File remains operational for the upcoming tax season.

Musk’s remarks came in response to a right-wing influencer who criticized the Direct File programme, calling it a “far-left government-wide computer office” established by Senator Elizabeth Warren. Musk replied: “That group has been deleted.”

As of Monday evening, the 18F website remained functional, and the Direct File system continued to operate. However, the official X account of 18F had been taken down.

IRS Plans to Expand Direct File Despite Industry Opposition

The IRS launched the Direct File pilot programme in March 2024, aiming to provide taxpayers with a free and easy electronic tax filing option.

Despite its initial rollout in 12 states, the programme has expanded to 25 states, with the IRS confirming in May 2024 that it intends to make Direct File a permanent service.

In October 2024, an IRS report revealed that users of the Direct File pilot programme claimed more than $90 million in tax refunds.

The agency also extended an invitation to all 50 states and the District of Columbia to join the initiative by 2025.

However, the private tax preparation industry has strongly opposed the programme, as many firms profit from charging taxpayers for filing services.

Commercial tax providers argue that sufficient free options already exist, though eligibility is often restricted by income limits.

While fillable tax forms are available on the IRS website, critics note that the process remains complex and requires manual tax calculations.

Public Support for Free Tax Filing

A 2023 poll by Navigator found that 76% of registered voters supported a government-run, free and simplified tax filing option. The survey also indicated strong support for Direct File among:

• Taxpayers earning under $50,000 (77%)
• Individuals aged 18 to 34 (81%)
• Black taxpayers (80%)

The Economic Security Project, which advocates for economic policies benefiting lower-income groups, reported that public backing for the Direct File system remains high, particularly among those who find private tax filing services costly or difficult to navigate.

The IRS has yet to respond to Musk’s claims about 18F’s dissolution, and it remains unclear whether his remarks will impact the future of the Direct File programme.