Elon Musk, who has been appointed as a "special government employee" by President Donald Trump, announced on Monday (Feb 03) that he had cut the staff of the Internal Revenue Service that oversaw the system that allows Americans to file their taxes for free easily on its website.

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The billionaire tech entrepreneur posted on his social media platform that he had "deleted" 18F, a government agency that handled multiple technology projects, including the IRS’ Direct File programme. This announcement created confusion about the future of Direct File, though the free tax filing system remains operational for at least the upcoming tax season.

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A right-wing influencer criticised thedirect filetax programme on X, describing it as a "far-left government-wide computer office" established by Elizabeth Warren. Musk responded, by saying, "That group has been deleted."

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As of Monday evening, the 18F website remained functional, along with the Direct File website. However, the X account for the digital services agency had been taken down.

Last year, the IRS confirmed that it intended to make its free electronic tax filing system permanent. It also extended an invitation to all 50 states and the District of Columbia to participate in the initiative, allowing taxpayers to file their returns through the programme by 2025.

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The Direct File pilot scheme was launched in March 2024. However, private tax preparation firms have strongly opposed the initiative, as they have profited substantially from charging individuals for tax filing services.

Commercial tax preparation companies argue that sufficient free filing options are already available. Several organisations, including private tax firms, provide free online tax preparation assistance, though eligibility is often restricted by income limits. While fillable forms are accessible via the IRS website, they can be complex, requiring taxpayers to manually calculate their tax liability.

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In May last year, the IRS confirmed that the Direct File programme would become permanent. Initially trialled in 12 states, it has since expanded to 25 states.  According to an IRS report from October 2024, users of the pilot programme claimed more than $90 million in refunds.

A 2023 poll conducted by Navigator showed that 76% of registered voters supported the IRS-run free and simplified tax filing option. The same survey found that approval for the "Direct eFile" tool was particularly high among tax filers earning under $50,000 (77%), individuals aged 18 to 34 (81%), and Black taxpayers (80%), as reported by the Economic Security Project.

(With inputs from agencies)