“To amend the Internal Revenue Code of 1986 to codify the Direct File program.”
No CRS summary available for this bill.
This section prohibits the Secretary of the Treasury from entering into any agreement after enactment that (1) restricts the Secretary's legal right to provide tax return preparation services or software or tax return filing services, (2) requires the Secretary not to provide such services or software for any period of time, or (3) conditions any provision of the agreement on the Secretary not providing such services or software. The section voids any such existing agreements 30 days after enactment.
This section establishes an IRS-operated online program (Direct File) through which taxpayers may prepare and file individual income tax returns, requiring the program to (1) be federally owned and use IRS records to simplify filing (including seamless data import), (2) employ a user-tested, interview-based system in plain language and multiple languages, (3) be mobile-accessible and conform to section 508 accessibility guidelines of the Rehabilitation Act of 1973 (i.e., ensuring comparable access for individuals with disabilities), (4) be prominently displayed and promoted on the IRS website via mass marketing and targeted outreach, (5) provide integrated live chat support, and (6) allow filing regardless of filing requirement. For taxable years beginning after 2027, the program must make at least 50% of taxpayers in participating states (i.e., those integrating state return filing or lacking a state income tax) eligible, with the Secretary expanding eligibility maximally and exercising discretion over eligibility determinations. The Secretary must report to Congress by August 31, 2027, and annually thereafter, on program usage, taxpayer satisfaction, barriers, and improvement plans. No fees may be charged, taxpayers remain responsible for return accuracy, and for integrating states, the program must enable seamless state/local return filing (subject to section 6103 confidentiality rules), including $1 million grants to qualifying states. This section also revises information return filing deadlines under IRC §6071(b) by requiring returns accompanied by statements (except nonemployee compensation) to be filed by the statement due date and other electronic returns by March 31 of the following year (previously, various deadlines including January 31). It authorizes necessary appropriations for FY2026 through FY2035.