The $93 Million Campaign to Keep Your Taxes Complicated
In Sweden, taxpayers approve their returns via text message. In Estonia, filing takes three to five minutes. In the United States, it takes 13 hours.
Estonia’s tax filing process takes three to five minutes for most citizens. The government pre-fills all forms with income data and deductions, and taxpayers simply log in with their digital ID, review the numbers, and click confirm. Since the early 2000s, Estonians have filed approximately 99% of tax returns electronically. Some taxpayers can complete their entire filing with a single click.
In Sweden, the tax agency Skatteverket sends pre-filled tax returns to most taxpayers, who only need to review and approve them. If no changes are needed, Swedes can approve their returns via SMS or phone. In Japan, most employees never file tax returns at all because employers handle the process automatically through year-end adjustments.
Meanwhile, the average American taxpayer spends 13 hours filing their return. Americans collectively spend approximately 7.1 billion hours annually collecting data and filling out forms, plus $14.5 billion on tax preparers and $6.1 billion on tax preparation software. The US tax system contains numerous deductions and credits with complex eligibility requirements, including above-the-line and below-the-line deductions that themselves split into itemized and standard categories.
The divergence between simple and complex systems stems from political and economic factors rather than technical limitations. An industry that profits off the complexity of the tax code has consistently blocked reform.
California nearly implemented such a system. In 2005, the state launched ReadyReturn, a pilot program that sent pre-filled tax returns to qualifying taxpayers. In 2012, 99 percent of taxpayers who used ReadyReturn stated they were satisfied with it, 97 percent said this was the type of service the government should provide, and 98 percent said they would use it again. Stanford law professor Joseph Bankman spent $35,000 of his own money hiring a lobbyist to advocate for making ReadyReturn permanent. On the day supporters planned to bring the bill to a vote, Bankman received a call from a politician friend who told him they were one vote short of the support needed to bring it to the floor. The bill died without ever reaching a vote. Between 2001 and 2010, Intuit spent more than $1.7 million lobbying in California to kill ReadyReturn.
The tax preparation industry has spent more than $93 million on federal lobbying since 2003. In 2002, the IRS signed an agreement with the Free File Alliance, a coalition of tax preparation companies, promising not to compete by creating its own free online tax preparation and filing services. Companies including Intuit organized this alliance after government officials proposed establishing a simple return system.
In 2016 alone, Intuit spent $2 million on lobbying while H&R Block spent $3 million, with efforts focused partly on preventing the government from offering its own free alternative to taxpayers. Since 1998, companies that help Americans file taxes and groups representing those companies have spent more than $40 million influencing Congress. A December 2019 addendum to the Free File Alliance agreement finally removed the restriction barring the IRS from creating its own tax preparation software.
After decades of industry opposition, something finally broke through. In May 2024, following a pilot program where over 140,000 taxpayers successfully filed their returns for free, the IRS made Direct File permanent. The program expanded to 25 states for the 2025 filing season, making free government filing available to more than 30 million Americans. Direct File users rated their experience excellent or above average at rates exceeding 90 percent, completing their returns in about an hour. The system covered more tax situations and worked on any device.
The victory lasted exactly one full tax season.
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In November 2025, Treasury Secretary Scott Bessent announced the Trump administration was terminating Direct File. The program had operated for the 2025 filing season but would not return in 2026. Bessent stated “we have better alternatives” and that the program “wasn’t used very much.” The administration cited costs of $138 per accepted return and usage by less than 0.5% of all taxpayers as justification for the termination.
The administration had been systematically dismantling the program even while it remained operational. In February 2025, Elon Musk’s Department of Government Efficiency eliminated 18F, the General Services Administration team that helped develop Direct File, and reduced U.S. Digital Service staff by over 80%. In April 2025, just days after the tax filing deadline, IRS staff assigned to Direct File received instructions to stop all development work for the 2026 season. By July, newly appointed IRS Commissioner Billy Long declared at a tax summit: “You’ve heard of Direct File, that’s gone. Big beautiful Billy wiped that out.”
The program’s actual performance told a different story than the administration’s rationale suggested. Direct File had doubled its usage from 140,000 returns in the 2024 pilot to nearly 297,000 returns in 2025. User satisfaction remained at 94%. The $138-per-return figure represented fixed startup costs divided by early adoption numbers, a metric that would have decreased substantially as usage scaled. The low adoption rate reflected limited marketing and the uncertainty the administration itself had created about the program’s future throughout the 2025 filing season.
Treasury’s official report recommended “refocusing IRS efforts on strengthening existing free filing programs, particularly Free File.” Free File is a partnership between the IRS and private tax preparation companies like Intuit and H&R Block. These companies spent $93 million lobbying against Direct File so taxpayers would have to use their Free File partnership instead. That partnership has achieved only 3% adoption among eligible taxpayers, partly because the Federal Trade Commission documented participating companies steering users away from free options toward paid products.
Intuit issued a statement praising the decision. Industry lobbyists called it “in the best interests of American taxpayers.” The same companies that killed California’s ReadyReturn had won again. The same companies that spent two decades and $93 million to keep taxes complicated so you’d pay them for help. The same companies that organized the Free File Alliance to stop the government from offering you a free alternative.
The technical capacity to simplify tax filing exists. The government built it. Users loved it. The Trump administration killed it at the request of the same industry that has been blocking tax simplification for 20 years.
Here’s what we do about it. Over the next few days, find @Intuit and @HRBlock on whatever platform you use. Don’t copy and paste anything. Tell them in your own words what you think about a company that spent $93 million lobbying to keep your taxes complicated. Tell them what you think about killing ReadyReturn when 99% of users loved it. Tell them what you think about lobbying the Trump administration to terminate Direct File after 94% of users rated it excellent. If you spent 13 hours on your taxes last year, tell them about it. If you paid $200 for software that should be free, tell them about it. If you’re angry that these companies profit from making a simple process complicated, tell them about it.
Make it personal. Make it specific. Make it sustained. Post today. Post tomorrow. Post the day after. Share this article if you want to share more detailed info, tag state representatives and governors. Every time someone in your life complains about tax season, tag these companies and tell them why. These companies have names, faces, and social media managers who report metrics to executives. Make it expensive for them. Make their brand toxic and have fun doing it. Make them explain to shareholders why their social media is full of people who know exactly what they did and exactly how much they spent doing it.
They spent $93 million over 20 years to keep our taxes complicated. We have our phones and the truth. Use them.
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References
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Djankov, S., & Nasr, J. (2024, March 16). How are countries making it easier to pay taxes? World Bank Blogs. https://blogs.worldbank.org/en/developmenttalk/how-are-countries-making-it-easier-pay-taxes
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Rubin, R. (2024, March 26). Inside TurboTax’s 20-year fight to stop Americans from filing their taxes for free. ProPublica. https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free
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Werfel, D. (2024, February). TurboTax maker Intuit spent millions in record lobbying blitz. OpenSecrets. https://www.opensecrets.org/news/2024/02/turbotax-maker-intuit-spent-millions-in-record-lobbying-blitz-amid-threats-to-tax-prep-industry/
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ABC News. (2025, November). IRS Direct File won’t be available for 2026 tax filing season. https://abcnews.go.com/US/wireStory/irs-direct-file-year-means-taxpayers-127237706
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Nextgov.com. (2025, November). Direct File won’t happen in 2026, IRS tells states. https://www.nextgov.com/digital-government/2025/11/direct-file-wont-happen-2026-irs-tells-states/409309/
Tax Notes. (2025, November 5). IRS shutters Direct File, citing cost and low uptake. https://www.taxnotes.com/featured-news/irs-shutters-direct-file-citing-cost-and-low-uptake/2025/11/05/7t7q0
U.S. Department of the Treasury. (2025, November). Report on replacement of Direc
t File 2025. https://home.treasury.gov/system/files/131/Report-Replacement-of-Direct-File-2025.pdf
Outsider looking in. All I can think about when I read these articles is "American Exceptionalism" and how so very far from reality that concept seems to be.
Intuit! I forgot about them! Again, as with everything shitty… follow the money!