Treasury Chief Information Officer Sam Corcos recommended the termination of Direct File, the IRS’s popular free tax-filing system, in a high-level meeting with Treasury Secretary Scott Bessent in early March. The proposal marks a sharp pivot for the Department of Government Efficiency (DOGE) leadership, occurring shortly after Corcos engaged with industry lobbyists representing private tax-preparation giants.
A Sudden Policy Reversal Under Lobbyist Influence
The decision to dismantle the service, which currently serves taxpayers across 25 states, appears to have crystallized within a single week. According to sources familiar with the matter, Corcos—the former CEO of an Andreessen Horowitz-backed startup—had expressed support for Direct File to IRS engineers as late as a weekend in early March. However, by the following Friday, his stance shifted entirely toward winding down the program.
This ideological U-turn followed a meeting between Corcos and Free File Inc. (formerly the Free File Alliance). This consortium, heavily influenced by Intuit, the maker of TurboTax, has spent two decades lobbying the federal government to prevent the IRS from developing its own internal filing software. While Direct File is expected to remain operational through the 2025 filing season, internal projections suggest the tool will be decommissioned by 2026.
Internal Friction and Conflict of Interest Allegations
The move has blindsided technical teams within the IRS. Earlier this year, prominent DOGE figures, including Steve Davis of The Boring Company and Amy Gleason of the US DOGE Service, had praised the project’s technical merits. Davis reportedly continued to direct DOGE operations even after officially stepping away from his formal government role, leading to internal power struggles with Corcos over agency leadership.
Compounding the controversy are significant financial ties between DOGE officials and the private tax industry. Court filings and financial disclosures reveal that Todd Newnam, Corcos’ direct supervisor and the DOGE lead for IRS matters, holds shares in Intuit. Other Treasury and Bureau of Fiscal Service officials, including Linda Whitridge and Tom Krause, also reported ownership of Intuit stock while overseeing the agency’s vendor and modernization strategies.
The Long War Against Free Government Filing
The push to eliminate Direct File aligns with a long-standing agenda by the American Coalition for Taxpayer Rights. David Ransom, a lobbyist for the group, previously urged the IRS to pivot away from consumer-facing software in favor of “modernization” priorities. Members of this coalition, such as TaxSlayer and TaxHawk, also belong to the Free File Alliance.
The industry’s history of undermining free alternatives is well-documented. Before Intuit exited the Free File Alliance in 2021, investigations by ProPublica revealed that the company had manipulated website code to hide free filing options from major search engines, effectively forcing eligible low-income users into paid products.
The “Mega API” and the Shift to Palantir
As DOGE moves to shutter the taxpayer-facing tool, the agency is simultaneously pivoting toward a centralized data architecture. Corcos recently spearheaded a three-day intensive workshop featuring representatives from Palantir to develop a “mega API.” This system is designed to provide a unified access point for all internal IRS records.
The agency is currently evaluating Palantir’s Foundry software to serve as the primary processing hub for IRS data systems. This transition, led by officials with deep ties to the tech sector and private equity, suggests a broader strategy to outsource core IRS infrastructure to preferred private vendors while eliminating government-run services that compete with established industry players.
