Senator Elizabeth Warren isn't mincing words about what she expects from the upcoming 2026 tax season: higher prices, bigger profits for tax-prep companies, and American taxpayers getting squeezed in the middle.
The Direct File Controversy
Warren took to X on Tuesday to blast the Trump administration's decision to kill the IRS's Direct File system, a free government-run filing option that she says was shut down right when it could have provided real competition to companies like Intuit's TurboTax and H&R Block.
"Thanks to Donald Trump, here's how this tax season will go: TurboTax and H&R Block will raise their prices and rake in huge profits by ripping American taxpayers off," Warren wrote.
The Massachusetts Democrat pointed to a Politico report showing that Direct File arrived just as these tax-prep giants were warning investors about rising costs and increased competition. Then came the one-two punch: Republicans passed their "One Big Beautiful Bill" stuffed with new deductions and credits that make tax returns more complicated, while the Trump administration decided to pull the plug on Direct File entirely.
What the Numbers Say
Direct File wasn't some pie-in-the-sky experiment. The program handled about 140,800 returns in its first season and roughly 296,500 in 2025 before it got axed. A 2023 IRS study found that 72% of surveyed taxpayers were interested in using a government e-file tool, and the agency estimated it would cost between $64.3 million and $248.9 million annually to run nationwide. That works out to potentially less than $10 per return, compared with the roughly $40 Americans currently pay on average for simple returns through private companies.
The Administration's Defense
Treasury Secretary Scott Bessent has defended the decision, arguing there are "better alternatives" and that the private sector can handle tax filing more efficiently than the government.
But with Direct File gone, taxpayers now face a narrower set of choices: file on paper, pay for commercial software, or hope they qualify for one of the existing limited free options. Warren is pushing to bring the free alternative back, setting up what looks like an ongoing fight over who should help Americans navigate their tax obligations.