H.R. 451 — FAIR PREP Act of 2025

This section establishes a prohibition on the Secretary of the Treasury (i.e., IRS) preparing any federal tax return or refund claim filed more than 30 days after enactment, treating any such document prepared via an electronic tax preparation service operated by the IRS—such as Direct File (as announced in the Federal Register on December 15, 2023 (88 Fed. Reg. 87057), and September 5, 2024 (89 Fed. Reg. 72699))—as prepared by the IRS. Exceptions apply to (1) qualified return preparation programs for low-income taxpayers (under IRC §7526A(e)) and (2) the IRS Free File Program (established November 4, 2002 (67 Fed. Reg. 67247)). "Prepare" includes completing and filing forms but excludes authorized computations or error corrections (under IRC §6102 or chapter 63) and fillable forms with automated calculations.

This section prohibits the Secretary of the Treasury from awarding grants, making payments, or entering into or maintaining contracts, other transactions, or reimbursable agreements for the development or operation of an electronic tax preparation service option after the date of enactment, unless otherwise authorized by law.