North Carolinians Deserve a Free Way to File Taxes

By: Phillip Sheldon

“Why am I spending money just to pay my taxes?” It’s a question millions of North Carolinians ask themselves every tax season. The emotions that tax season brings up range from anxiety about what we might owe, fear of making a mistake, hope for a bigger tax return or lower tax bill than last year, and frustration at the tax filing process. Too many Americans end each tax season feeling swindled, having paid unexpected fees after being hooked by the promise of “free” tax preparation support from a for-profit company. 

Tax season doesn’t have to be a costly headache. It’s called IRS Direct File, and this year it’s available in 25 states, including North Carolina. Direct File can do something that no for-profit tax preparer can: automatically import your tax records for free, which makes filing easier and reduces errors. After your federal return is complete, the system can transfer your information to North Carolina’s companion state tool so you don’t have to double the work. And all of this is absolutely free, with live chat support available from IRS tax experts to help as you complete your federal return. 

But for-profit tax preparation companies and some federal and state lawmakers are threatening to kill Direct File. We can’t let them take away this crucial service that works for everyday North Carolinians.

Filing taxes is, after all, a government-mandated process, so it makes sense for the government to offer a trustworthy, no-cost option to complete that task. The IRS Direct File program delivers on that promise by helping taxpayers access valuable credits, such as the Earned Income Tax Credit and Child Tax Credit, which can be life-changing for hardworking families, especially in rural areas and among military communities. It reduces waste, improves transparency, and ensures that more people can keep what they earn. For North Carolinians and communities across the country, Direct File represents an efficient, pro-family, and commonsense solution that should earn broad bipartisan support. It’s a powerful example of government working as it should: making life a little easier and more affordable for the people it serves.

However, while Direct File is beneficial for taxpayers, it is also drawing criticism from those who find the tax filing process complicated and costly. Let’s take a closer look at the for-profit tax companies that are spending millions of dollars to lobby against Direct File. In 2022, Intuit (TurboTax’s parent company) agreed to pay a $141 million class-action settlement, facing allegations from Attorneys General in all 50 states and D.C. that Intuit deceived and charged TurboTax customers who would have qualified for free tax filing, in violation of the States’ consumer protection laws. 

No wonder these same for-profit tax preparation companies have spent millions of dollars lobbying to prevent the IRS from creating a truly free tax prep option. These companies contributed more than $1.8 million to US House members, some of whom later urged the Trump administration to end the IRS Direct File program on “day one.”

Yet many leaders—including Senators Elizabeth Warren and Tom Carper, and Representatives Katie Porter and Brad Sherman—have publicly supported Direct File, arguing that taxpayers deserve a free, simple way to file their taxes without relying on costly intermediaries. And here in North Carolina, former Department of Revenue Secretary Ronald Penny made it clear that the state’s participation in Direct File is about fairness and access, especially for those who can least afford to pay for what should be a basic public service.

IRS Direct File launched in 2024 as a pilot across 12 states. Direct File users who participated in that first year gave rave reviews – 90% of participants surveyed rated their overall Direct File experience as “Excellent” or “Above Average” and 86% felt it increased their trust in the IRS. As IRS Direct File expanded to 25 states in 2025 it also grew in scope, supporting more tax forms and adding new features. IRS Direct File can now import certain types of taxpayer information and tax forms, including the tax form you receive if you get health insurance coverage through an ACA “marketplace” plan. 

Direct File is most helpful to North Carolina taxpayers who may struggle with specific forms. Most North Carolina taxpayers enrolled in an ACA health insurance plan don’t know to look out for that tax form, and failure to include that form is the number one reason that tax returns are rejected (across all tax filing methods). This simple feature aids so many North Carolinians avoid delays in receiving their tax refunds. 

To be clear, direct FIle does not mean that TurboTax or H&R Block must disappear. Not all taxpayers will choose to use Direct File – that’s not the point. Many taxpayers with complex tax situations are glad to have the support of a paid, trusted tax preparation professional and choose to invest in those services. Direct File is about expanding our options and ensuring that a free, trustworthy alternative exists for those who want it. 

American taxpayers deserve what taxpayers in most other countries have had for years – a free, easy way to file our taxes directly with the government. Whether you used Direct File this tax season or not, it is now our job to speak up and tell Senator Tillis and other lawmakers that we value and need Direct File. When leaders support Direct File, they’re standing up for working families, military communities, and rural residents who deserve easier access to the tax credits they’ve earned. It’s a smart, bipartisan way to reduce stress, save money, and make tax season a little more manageable for us all. Our wallets and our sanity every April, depend on it.

Call Senator Tillis’ office at (202) 224-6342 or visit his website to voice your support for IRS Direct File.

Phillip Sheldon currently serves as Program Manager with MDC Rural Forward, where he leads economic security initiatives and provides assistance to partners in Halifax & Northampton counties, specializing in elevating rural communities’ needs.