Sponsors (11)
The bill preserves taxpayer control and private‑market tax‑preparation choices and reduces the risk of government favoritism, but it removes the option of a government‑run or -supported free filing service and restricts modernization efforts—likely increasing costs and slowing potential efficiency gains for lower‑income and other taxpayers.
Most taxpayers retain independent control over how they prepare and submit returns because the bill prevents the Treasury/IRS from operating or contracting a government-run tax‑prep platform, preserving private‑market choices.
Low-income filers continue to have access to existing private free-file partnerships and qualified preparer options so they can still obtain partner-provided free preparation services.
The bill lowers the risk that federal funds would be used to favor, subsidize, or implicitly endorse a specific electronic tax‑preparation vendor by blocking Treasury from funding or contracting such services without explicit statutory authorization.
Low‑ and middle‑income taxpayers lose access to a potential free IRS‑operated tax‑preparation option, which could increase out‑of‑pocket filing costs and make tax filing more complex for those who would have used a government service.
By prohibiting Treasury/IRS from pursuing pilot projects or partnerships to modernize filing systems, the bill slows possible improvements in filing efficiency, fraud detection, and long‑term compliance cost reductions—potentially forgoing future taxpayer savings.
The change may increase reliance on paid commercial software or paid preparers, raising recurring filing costs for filers who would have used a free or government‑supported option.
Based on analysis of 3 sections of legislative text.
Introduced January 15, 2025 by Marsha Blackburn · Last progress January 15, 2025
Prohibits the Treasury/IRS from preparing tax returns or refund claims itself or via an IRS-operated electronic preparation service, and blocks Treasury from awarding grants or contracts to develop or operate an electronic tax-preparation option unless another law specifically authorizes it. The measure preserves two narrow exceptions: returns prepared through an existing "qualified return preparation program" and returns prepared under the IRS Free File program, and it excludes routine automated calculations and certain error corrections from the ban.