S. 96 — FAIR PREP Act of 2025

This section prohibits the Internal Revenue Service (IRS) from preparing any federal tax return or refund claim imposed by the Internal Revenue Code, except as provided under existing authorities in §§ 6014 (taxpayer election for IRS computation of tax for non-filers), 6020(a) (substitute returns for non-filers), and 6020(b) (preparer-signed returns), for returns filed more than 30 days after enactment. It deems any such return or claim prepared using an IRS-operated electronic tax preparation service—specifically, the Direct File program (as announced in 88 Fed. Reg. 87057 and 89 Fed. Reg. 72699)—to be prepared by the IRS, but exempts (1) qualified return preparation programs (as defined in § 7526A(e)) and (2) the IRS Free File Program (as established in 67 Fed. Reg. 67247). "Prepare" is defined to include completing or filing any portion of a return or claim but excludes IRS-authorized computations (§ 6102), mathematical/clerical error corrections (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.