Sponsors (125)
Official title: To amend the Internal Revenue Code of 1986 to codify the Direct File program.
Introduced March 4, 2026 by Brad Sherman · Last progress March 4, 2026
The bill would create a government-run, free and accessible online filing option that could save time and money for many taxpayers and improve access for people with disabilities and limited English, but it increases government involvement with potential privacy and cybersecurity risks, ongoing costs, legal exposure, and competitive impacts on private tax-prep providers.
Broadly, taxpayers can prepare and file federal (and integrated state) income tax returns for free through a government-run online and mobile platform, reducing out-of-pocket filing costs and simplifying filing for many households.
People with disabilities and limited-English speakers will get better access because the service must meet Section 508 accessibility standards and provide plain-language, multilingual, user-tested interfaces.
Taxpayers can benefit from prefilled returns using IRS records, which may reduce preparation time and the likelihood of data-entry errors for filers who review and accept prefilled information.
Taxpayers' sensitive tax data may be more widely shared and centralized for prefill and state integration, increasing privacy exposure and creating a concentrated target that heightens cyberattack risk.
People who use government-prefilled returns remain legally responsible for accuracy and could face audits, penalties, or other enforcement actions if prefilled errors go uncorrected.
Expanding Treasury-provided services and removing certain contractual restrictions could crowd out private tax-preparation businesses, harming small firms and reducing consumer choice in the tax-prep market.
Based on analysis of 6 sections of legislative text.
Requires the Treasury/IRS to create, operate, and promote a free federal online tax-preparation and e-filing program with prefilling, accessibility, multilingual support, and participation targets.
Requires the Treasury Secretary (IRS) to build, operate, and promote a federally owned online system that lets individual taxpayers prepare and electronically file income tax returns for free. The system must offer IRS-prefilled returns at taxpayer election, interview-style plain-language guidance in multiple languages, mobile access, Section 508 accessibility, prominent placement on the IRS website, and integrated customer support. Sets a goal that for taxable years beginning after 2027 at least half of taxpayers in eligible "participating States" be eligible to use the program, directs the IRS to expand eligibility as much as possible, and requires annual reporting to Congress on usage, satisfaction, barriers, and improvement plans. The bill also forbids Treasury from entering or continuing agreements that restrict the agency from offering tax preparation, and it voids pre-enactment agreements containing such restrictions after 30 days.