A network of progressive non-profits has quietly spent years pushing the IRS’s new “Direct File” service.
Progressive supporters of Direct File claim to advocate for low-income taxpayers. Research shows that key organizations promoting Direct File are closely tied to Arabella Advisors and its billion-dollar network of left-leaning dark money groups.
One Arabella-backed organization, the Economic Security Project (ESP), has funded advertising and research in support of Direct File. Last year, the group received a $752,197 grant from the Bill & Melinda Gates Foundation to “conduct research on the impact and usage” of Direct File.
A person holds a poster encouraging people to use IRS Direct File on April 5, 2024, outside the IRS building in Washington, DC. (Photo by Tasos Katopodis/Getty Images for Economic Security Project)
That work culminated in a media blitz encouraging largely low-income taxpayers to adopt Direct File, which was first made available as a pilot program in 2024 for taxpayers across a dozen states. Last year, the IRS agreed to make the program permanent, but it has since come under fire from the Department of Government Efficiency (DOGE). Trump-appointed Treasury Secretary Scott Bessent agreed to temporarily keep the program through the 2025 tax season, earning him praise from progressive groups including ESP.
ESP is fiscally sponsored by the Hopewell Fund, a nonprofit managed by Arabella Advisors. The arrangement allows ESP to operate as a project of the Hopewell Fund, taking advantage of Hopewell’s nonprofit status without having to register with the IRS or publicly disclose its own finances.
ESP’s goal isn’t simply to make filing taxes easier. Adam Ruben, a former aide to Sen. Elizabeth Warren (D-MA) who is now managing outreach for the group, called Direct File “[o]ne of the best tools we have to create the infrastructure for guaranteed income in this country” and said Direct File “is a huge opportunity for economic security and racial equity.”
Groundwork Collaborative, another non-profit receiving funding through the Arabella Network, has led its own media blitz supporting Direct File. Groundwork Action, the group’s advocacy arm, funded a “Better IRS” ad campaign promoting direct file and attacking private-sector tax preparers. Like ESP, Groundwork is led by a former policy advisor to Elizabeth Warren.
ESP and Groundwork help fund and operate The Coalition for Free and Fair Filing, which “supports the Internal Revenue Service’s efforts to create a free online direct tax filing tool,” according to the group’s website. “The coalition is composed of organizations committed to racial and economic justice, consumer protection, the advancement of civic technology and the promotion of equity in tax administration.”
Supporters of Direct File frame it, in part, as an effort to help low-income tax filers and also as a better way to ensure collection of higher tax revenues by the IRS.
Critics of Direct File highlight the inherent conflict of interest in having the IRS prepare people’s tax returns. Last year, a group of Republican Senators challenged the IRS’s ability to unilaterally launch such a program, saying “[s]erious legal questions exist about the IRS Direct File launch,” which was undertaken without Congressional approval.
The IRS initially received funding for a pilot program for an in-house tax filing tool through the Inflation Reduction Act. Last year, Direct File was made available to users in 12 states. For 2025, availability has expanded to 32 million taxpayers in 25 states.
Jacob McLeod is a researcher and writer focusing primarily on corruption in politics.
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