How a free tax filing system from the government went from 296,000 users to zero in just one year

This 2026 tax season is the first in which Americans can’t use Direct File, a short-lived IRS initiative intended to save 30 million Americans time and money they would have otherwise spent getting their taxes done through a private tax preparer. The Direct File program prepared your taxes: listing exactly how much you made and owed, and all for free. But thanks to lobbying efforts from such tax giants like H&R Block and Intuit, that initiative is all but dead, and taxpayers once again are relegated to spending hours and untold amounts on filing their taxes.

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The death knell of the Direct File program is in part thanks to more than $103 million in federal lobbying efforts from H&R Block and Intuit alone since 2003 ($20.8 million of which were spent in the last three years alone since Direct File came and went). And now marks the first year following the two-year program that saw over a 90% satisfaction rate by the average American taxpayer. Supporters of the program point to the lobbying efforts by those two tax giants alone as removing a public good to drive the bottom line, while the companies themselves point to the large number of people who use their services compared to the less than 1% of eligible Americans who used the IRS’ service. Whichever side you fall on, here’s a timeline of the last two decades that have culminated in today’s tax filing practices.

It started two decades ago

In the 2002-2003, the IRS flirted with building a free online filing system and then backed away, in part due to private tax preparers that didn’t want to lose their grip on the process. Instead of launching its own tool, the IRS, under pressure to offer a no‑cost electronic filing service, entered into a public‑private partnership with tax prep companies, most prominently Intuit, the maker of TurboTax, and H&R Block. In exchange for a promise that the IRS wouldn’t build a direct competitor, the companies agreed to offer certain low‑ and moderate‑income taxpayers free versions of their software through a “Free File” portal.

For the 2025 tax year, you’re eligible for the service if you made $89,000 or less in 2025—and if you are able to click through a series of seemingly never-ending obstacles that will eventually direct you to that free service. For everyone else, the IRS’ short-lived free Direct File program was the closest taxpayers came to having a free tax filing service—and, as experts say, posed such a threat to private tax preparers that the death of the service was inevitable.

“It’s such a clear‑cut example of a really common problem in our politics,” Brookings senior fellow Vanessa Williamson told Fortune. “What’s good for the many has a hard time succeeding in Congress against the narrow loss of a well‑funded small group.”

The public-private partnership, dubbed the Free File Alliance, created the Free File portal—which, since its inception in 2003, over 65 million Americans have used to successfully submit their tax returns. A 2019 ProPublica investigation revealed tax preparers like the two tax giants among others would deter people who otherwise qualified from accessing the free software.

“Again and again, we find the profit incentive driving away from quality services,” Williamson said. “You think you’ve clicked the free option, and then you go through the whole process filling out your taxes, and then at the end there’s actually a bill, because somewhere along the way you clicked the wrong button.” The result, she argues, is a “Rube Goldberg device” that embodies “predatory profit‑making at the expense of the public good.”

This caused intense public backlash. Sen. Elizabeth Warren and then-Rep. Katie Porter went on a public campaign against the lobbying efforts by tax preparers, specifically Intuit and H&R Block, and criticized them for effectively rendering the Free File portal unusable for most Americans who qualify for it. Following this publicity, H&R Block left the Alliance in 2020, and Intuit shortly followed suit, leaving in 2021. (In a statement to Fortune, an Intuit spokesperson said that reporting didn’t point to the company’s internal data showing more people used its Free File offering in 2019 than the year before. The company says it left the Free File Alliance in 2021 because of limitations in the model, not to kill free filing).

Neither Porter nor the IRS, responded to Fortune’s requests for comment. Sen. Warren exclusively shared with Fortune remarks ahead of her address to Congress in her introduction of a bill to bring back the Direct File.

“This story tells you all you need to know about why Republicans will block my bill today. This is all about money and power. It’s about letting big corporations donate to politicians and then politicians letting those companies rip off American families,” Warren’s remarks will read later on Tax Day. “

“To Republicans who say that it’s already free to file your taxes: go talk to the millions of people who paid over a hundred