Tax Prep, GOP-Aligned Groups Lobby to End IRS’ Direct File

Tax prep companies are close to a long-held goal of scrapping the IRS Direct File program, and spent millions this year to further that aim, among other policies.

Critics of the free IRS tax filing program like Intuit and H&R Block, along with backers, kept up spending to influence federal agencies and Congress in the third quarter, according to federal disclosures released this week.

That’s even after the July enactment of the GOP tax law, which gave the IRS $15 million to study a private-public program that presumably could replace Direct File. Republicans have railed against the program since its inception under the Biden administration and with full control of Washington, its future seems dim.

Intuit cut checks totaling $900,000 in the third quarter of 2025, bringing total lobbying spending on all issues for 2025 to about $3 million. That’s slightly above 2024 when its spending through the first three quarters totaled $2.9 million. H&R Block spent $2.4 million in 2025, the same amount through the first three quarters of 2024.

Intuit, which sells the blockbuster private filing software TurboTax, said in a statement it “regularly engages with policymakers on issues including tax simplification, increasing digital access for small businesses, and stronger consumer protections for individuals.”

H&R Block, which warned in corporate filings that products like Direct File could adversely impact their revenue and profitability, in a statement said its efforts aim to “inform federal and state policymakers on the real-world ramifications of tax law changes for individuals, families, and small businesses.”

GOP lawmakers hoped to give Direct File a death blow by inserting language killing the program within 30 days from enactment of the mammoth July tax law, but Republicans ultimately removed it after Democrats challenged it as a violation of Senate procedural rules.

IRS leaders have given conflicting statements on the availability of Direct File this filing season. The tax law’s study was due to Congress Oct. 2, but seems held up by the government shutdown. The report calls for studying options to provide free tax filing to up to 70% of all taxpayers.

Right-Wing Interests

Conservative organizations seeing rising clout in President Donald Trump’s second term also sought to influence lawmakers.

The new Alliance for IRS Accountability, led by former Breitbart News executive Charles Flint, listed Direct File among issues lobbied on as part of the $210,000 spent on lobbying since it registered in March, disclosures show. Flint also worked for Sen. Marsha Blackburn (R-Tenn.).

Among its priorities, AIA seeks greater legal protection for small and large businesses, and pushed for removal of a top IRS official.

Holly Paz, the IRS Large Business & International Division commissioner, was placed on administrative leave for unspecified conduct against Republicans in July.

Paz is suing the IRS and Treasury Department, alleging she’s been the target of “an intentional vindictive, retaliatory undertaking” and that the agencies unlawfully leaked her personal information.

A spokesperson for AIA wasn’t available for comment.

Other corporate critics like the American Coalition for Taxpayer Rights, which represents tax-prep companies including Intuit and H&R Block, spent $270,000 on lobbying through the third quarter of this year, disclosures show.

David Ransom, counsel at ACTR, called Direct File misguided and said the industry was looking ahead to the next iteration of free filing programs and said private sector preparers annually provide millions of free tax returns.

Another Option, or Redundant

Republicans call the Direct File program redundant, criticize its costs, and argue the Democrats’ 2022 tax-and-climate bill only authorized a limited pilot program.

Supporters say the program gives taxpayers another option to navigate the sometimes-confusing free options for filing their taxes.

Though outspent by the industry and trade groups exponentially, taxpayer advocates like Oxfam America and the Economic Security Project Action also noted they lobbied Congress to support Direct File on third quarter reports in 2025.

But some groups appear to have already moved on to the next tax battle.

For instance, Public Citizen didn’t mention the program this quarter. Instead, its third-quarter filing, which reported $99,800 in spending, mentioned tax issues, including the Wall Street Tax Act and Tax Filing Simplification Act.