“A bill 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 restricts the Secretary's legal right to provide tax return preparation services or software or tax return filing services, requires the Secretary to not provide such services for any period of time, or conditions any provision of the agreement on the Secretary not providing such services. The section voids any such existing agreements 30 days after enactment and defines the Secretary as the Secretary of the Treasury or the Secretary's delegate.
This section establishes an IRS-operated online program (known as Direct File) under new IRC §7531 for taxpayers to prepare and file individual income tax returns, which must (1) be federally owned and use IRS data for seamless import, (2) employ an interview-based system in plain language and multiple languages accessible on mobile devices and conforming to federal accessibility standards under Section 508 of the Rehabilitation Act of 1973 (29 U.S.C. 794d), (3) be prominently displayed and promoted on the IRS website via mass marketing and targeted outreach, (4) provide integrated live chat support, and (5) allow filing regardless of filing requirement, with no fees charged. For taxable years beginning after 2027, at least 50% of taxpayers in participating states (i.e., those integrating state return filing or lacking a state income tax) must be eligible, with the Secretary expanding eligibility maximally and determining participants; the Secretary must report annually to Congress beginning August 31, 2027, on usage, satisfaction, and barriers. The section further enables seamless state and local income tax filing in integrating states (via data sharing under IRC §6103 and $1 million grants to qualifying states), affirms taxpayer responsibility for return accuracy, revises IRC §6071 to establish new deadlines for certain information returns (e.g., those with statements by the statement furnishing date; other electronic filings by March 31), includes a conforming amendment to the IRC table of sections, and authorizes necessary appropriations for FY2026 through FY2035.