Tax Coda Weekly Digest — November 9, 2025
This week, the tax world saw policy reversals, power checks, and credibility tests.
Treasury pulling the plug on Direct File, courts cutting back regulatory reach, and the IRS balancing compliance relief with enforcement. The theme is accountability. Each branch is reclaiming its lane.
1. Treasury moves to shut down IRS Direct File
Treasury told Congress it wants the IRS to stop running Direct File, the government’s in-house free filing system. The report says Direct File reached less than 1% of taxpayers, cost too much per return, and was distracted from modernization priorities. Treasury says the IRS should instead improve Free File and volunteer prep programs.
Why It Matters:
Marks an official retreat from government-run return prep after one year of testing.
Signals a stronger reliance on private software and community programs for free filing.
Indicates Treasury wants to reallocate resources to core modernization work.
Takeaway:
Direct File is done. Expect free filing efforts to shift ba…
