Sponsors (11)
The bill preserves taxpayer choice and limits federal spending/contracting for government tax‑preparation services, but at the cost of forgoing a potentially simpler, lower‑cost government filing option and slowing modernization that could benefit many filers.
Taxpayers retain private-market choice: prevents the IRS from building a general government tax‑preparation service, preserving options for paid preparers and commercial software firms to serve filers.
Low‑income and other eligible filers keep access to Free File and qualified volunteer programs as the preserved pathways for free or assisted filing.
Limits on Treasury/IRS spending and contracting for new electronic tax‑prep projects reduce the risk of expanded federal contracting and program costs without separate authorization.
Many taxpayers (especially low‑ and middle‑income filers) lose the prospect of a simple, government‑run free e‑file/preparation option, which could make filing harder or more expensive for those who would have used it.
Slows or blocks IRS/Treasury modernization of electronic preparation and service improvements by prohibiting new contracting/efforts, and may prevent coordinated public‑private standards leading to continued market fragmentation.
Shifts assistance and compliance burden away from the IRS onto private preparers and volunteer programs, reducing direct IRS help for filers with complex returns.
Based on analysis of 3 sections of legislative text.
Bars the Treasury/IRS from preparing returns or running/contracting for an IRS-operated electronic tax-preparation service, with narrow exceptions for certain qualified programs.
Prohibits the Treasury Secretary and IRS from preparing individual tax returns or refund claims and from developing, contracting for, or funding an electronic tax-preparation service option after enactment, with limited, narrow exceptions for certain preexisting programs. The prohibition treats any return prepared through a Secretary-operated electronic preparation service (including direct e-file systems) as prepared by the Secretary and therefore barred, while preserving specified carve-outs for qualified third‑party preparer programs and the IRS Free File arrangement as defined in past Federal Register notices and statute. The ban takes effect for returns filed more than 30 days after enactment.
Official title: Amend the Internal Revenue Code of 1986 to prohibit certain activities constituting preparation of tax returns by the Secretary of the Treasury, and for other purposes.
Introduced January 15, 2025 by Marsha Blackburn · Last progress January 15, 2025