Direct File Act
Floor Speech
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Ms. WARREN. Mr. President, I want to say thank you to my partner in these efforts, Senator Blumenthal, and to all the others who have come here to speak on tax day about how outrageous it is that a program to actually let people pay their taxes online for free has been destroyed by Donald Trump and the Republicans.
So I am about to call up a bill to the floor that would let Americans file their taxes for free directly with the IRS. It is amazing to me that anyone could oppose this, especially when filing your taxes is something that Americans are required by law to do every year. But as sure as the Sun will rise, Republicans are going to block my bill.
For years, giant tax prep companies like TurboTax and H&R Block have rigged our system so they can cash in on your hard-earned dollars, and the result is that people spend now an average of 8 hours and $160 each year just to file their taxes using tax prep services.
These big companies don't just take a fee for filing your taxes; they have actually become experts at figuring out ways to upsell, to charge junk fees, and to make money off your personal information. It is really outrageous.
So I drafted a bill that would allow Americans to file their taxes online for free and directly with the IRS through a program called Direct File.
Now, tens of millions of people wouldn't have to go to a paid preparer if they didn't want to. They could just file directly with the IRS.
Over 160 Members of Congress have joined me on this bill. Over 100 unions and advocacy groups and national organizations have endorsed this bill. And I am forcing the Senate to decide today: Will we pass this bill?
During the Biden administration, the IRS ran a pilot program for Direct File. People who had a chance to use it loved it. Ninety-four percent of taxpayers who used the program described their experience as ``excellent'' or ``above average,'' which, by the way, is not exactly how most Americans describe paying their taxes most of the time. But Direct File worked. We have seen it. We actually made it work.
And once it was fully operational, Direct File was projected to save taxpayers $23 billion a year and more hours than anyone could count.
So why do we not have Direct File today? We already had it. We set it up during the Biden years, ready to go, and had it underway. It was working. Well, the answer is tax prep companies hated it, and they hated it because it cut into their bottom line.
Why would people pay for TurboTax if they could easily file their taxes online for free?
And that is why, for years, big tax prep companies have lobbied the government to keep people from using a program like Direct File.
Now, the Direct File pilot project was a huge success, and yet it was dropped. Why? Well, first, the company that runs TurboTax, Intuit, donated a million dollars to Donald Trump's inauguration. And then, a few months later, reports came out that Donald Trump and Elon Musk wanted to kill the free tax filing program. And last fall, they delivered. That is exactly what they did.
This story tells you everything you need to know about why Republicans will block my bill today. This is all about money and power. It is about letting big corporations donate to politicians and then politicians just opening the doors so those big companies can rip off the American people.
To Republicans who say that making filing your tax for free with the IRS is too expensive, I just want to point out that for one day of bombing in Iran, we could pay for 20 years of Direct File.
And to Republicans who say that it is already free to file your taxes, I say: Go talk to the millions of people who paid over 100 bucks to file their taxes this year and ask them just how free it was, even when they click on the ``free'' buttons, and how it is that these guys have managed to put them in places where they end up paying.
And to the Republicans defending the status quo, just ask yourselves: Why are you on the side of TurboTax and H&R Block, instead of your constituents?
Filing your taxes should be easy and free, and I urge every Senator to vote yes on the Direct File Act. Let's save people some time and some money and show the American people that we can actually make government work not just for giant corporations, but we can make government work for them.
3948; that the bill be considered read a third time and passed; and that the motion to reconsider be considered made and laid upon the table.
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Ms. WARREN. Mr. President, I truly am shocked to hear my colleague from across the aisle describe Direct File as too expensive for the American people. I think he said it cost $41 million to administer this system. If it is fully operational, Direct File is projected to save taxpayers $23 billion a year and countless hours of hassle. There are very few things that happen here in Washington that give such a good return on investment to taxpayers.
Senator Crapo said that people didn't use Direct File and suggested they didn't like it somehow. You know why people didn't use Direct File last year with the Republicans in charge? Maybe it was because the Trump administration and the Republicans accepted millions of dollars from the tax prep companies and did their best to sabotage the program. Here is what we know for sure: Polling shows that over 75 percent of Americans support free tax online filing from the IRS. If you invest in free tax filing, Americans are going to use it.
In fact, we know that because in the pilot project run by the Biden administration, 94 percent of those who used the program said it was excellent or above average. Not usually the kind of responses we get from people when they are paying their taxes.
The argument that Republicans make that Americans can already file their taxes for free with Free File, all I will say is: Well, tell that to the millions of people who paid more than a hundred bucks each to file their taxes this year. Independent watchdogs have concluded over and over and over again that the tax prep companies that run Free File make it incredibly hard for people to find it; and, once they find it, incredibly hard for them to use it. So what do people do? They end up paying through the nose just to file their taxes.
And you know who never got charged to file their taxes? The people who used Direct File. Direct File is the only truly free online filing option for Americans.
You know, the Republicans have argued that it presents conflict of interest for the IRS to both prepare and audit your taxes. I think somehow they seem to misunderstand how Direct File works. People who use Direct File are the ones preparing their own taxes, not the IRS-- just like the people who use TurboTax are the ones using a program to prepare their own taxes.
And you know what happened when people used Direct File to prepare their taxes? Their returns got accepted at a higher rate than any other self-prep software--that is, it worked better than TurboTax; it worked better than the services that Americans are paying for.
Look, we know what is going on here, and that is that the Trump administration and the Republicans are accepting millions of dollars in donations--a point that was not refuted by the objector to this bill. They are accepting millions of dollars in donations from these tax prep companies; and then in return for that money, shutting down Direct File. That is where the real conflict of interest is.
Look, we have a choice to make as a U.S. Senate, and that is: Who are we here for? Why are we here to protect two multibillion-dollar companies that manage to make big bucks by charging individual families $100, $150, $175 just to pay the taxes that they are legally required to pay?
We have a system that works. It would save people billions of dollars across this country. The only reason that we are not doing this is because the tax prep companies have figured out that making political contributions to the Republicans pays off big time. They can kill off a program that would be good for the American people but would hurt their own profitability.
You have got to make a decision: Whose side are you on? The Democrats are on the side of saving money for American taxpayers. The Republicans are on the side of two big tax prep companies because they get paid to be on their side.
So we may not get this one through today, but we will keep coming back.
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