The IRS has announced that its free Direct File system will be available to taxpayers in all 50 states starting with the 2027 tax season, eliminating the need for paid tax preparation software for most filers.

Expansion

After successful pilots in 12 states covering 500,000 filers, the IRS is scaling Direct File nationwide. The system handles W-2 income, standard deductions, child tax credits, and student loan interest.

Industry Impact

TurboTax maker Intuit and H&R Block have seen stock prices decline 15-20% on the announcement. Both companies lobbied aggressively against the program.