Elon Musk's Comments Spark Confusion on IRS Direct File Program

Updated 12:00 PM EST, October 9, 2023

WASHINGTON (AP) — Tech billionaire Elon Musk stirred confusion on Monday when he announced on his social media platform that he had "deleted" 18F, a government agency involved in various technology initiatives, including the IRS’ Direct File program. This comment raised questions about the availability of the Direct File program for taxpayers, but it has been confirmed that the free filing service will still be operational for the upcoming tax season.

Despite Musk's tweet, which implied the agency's termination, a source familiar with the IRS confirmed that the Direct File program is still processing tax returns. This individual spoke to The Associated Press under the condition of anonymity due to restrictions on interacting with the media.

As of Monday night, the website for 18F remained active, as did the Direct File portal. However, the agency's account on the social media platform X has been deleted.

The IRS previously announced that it plans to make the free electronic tax return filing system a permanent option. The agency has requested that all 50 states and the District of Columbia collaborate to assist taxpayers with this program by 2025.

The Direct File initiative is set to launch its trial run in March 2024. However, the IRS is facing significant opposition from private tax preparation companies, which have been financially benefiting from charging customers for their services. On average, taxpayers spend about $140 each year preparing their taxes.

Private tax preparation firms argue against the development of the Direct File program, suggesting that free filing options are already accessible. Several organizations provide free online tax preparation services for individuals meeting specific income criteria. While the IRS does offer fillable forms online, they can be complex and typically require taxpayers to compute their tax liability on their own.

Last May, the IRS confirmed its commitment to the Direct File program, expanding its availability from 12 to 25 states since last year’s pilot program.

This program is designed for individuals in certain states with straightforward W-2 forms, enabling them to directly calculate and file their taxes with the IRS. Participants in the pilot program during 2024 received over $90 million in refunds, according to an IRS announcement in October.

During his confirmation hearing on January 16, Scott Bessent, currently the treasury secretary, promised to uphold the Direct File program for at least the 2025 tax season, which commenced on January 27.

Musk's remarks were in response to another user's claim on X that characterized 18F as "far left" and suggested that Direct File "puts the government in charge" of tax preparation. Musk then stated, "That group has been deleted."

Elon, IRS, DirectFile