U.S. Sens. Marsha Blackburn (R-TN) and U.S. Rep. Adrian Smith (R-NE) on Jan. 15 led a bicameral bill that would terminate the Direct File tax filing program of the Internal Revenue Service (IRS).
“By taking on the role of both tax preparer and tax auditor, the IRS created an undeniable conflict of interest when it circumvented Congress to establish the Direct File program,” Sen. Blackburn said. “This legislation would right this wrong by stopping the IRS from preparing tax returns without explicit legislative approval and ending this wasteful and misguided program.”
Sen. Blackburn sponsored the Fostering Autonomy in Independent Returns by Prohibiting Redundant and Extralegal Programs (FAIR PREP) Act, S. 96, alongside 10 GOP cosponsors, including U.S. Sens. Steve Daines (R-MT), Thom Tillis (R-NC), and Shelley Moore Capito (R-WV).
Rep. Smith sponsored the same-named H.R. 451 in the U.S. House, also with 10 Republican original cosponsors, including U.S. Reps. Andrew Garbarino (R-NY), Vern Buchanan (R-FL), Steve Womack (R-AR), and Carol Miller (R-WV).
If enacted, the bill would bar the IRS from preparing taxpayer returns without congressional approval, and would establish safeguards to prevent the IRS from sidestepping Congress, according to a bill summary provided by the lawmakers.
“Despite its supersized funding in the Democrats’ Inflation Act, the IRS has shown it is more focused on intruding on Americans’ financial privacy than helping them navigate our overly complex tax code,” said Rep. Smith. “This bill would protect Americans from further overreach and unnecessary audits while leaving existing free tax filing options intact.”
Specifically, the measure would add a new subsection to Section 6020 explicitly prohibiting the IRS from preparing tax returns in unauthorized instances, beginning 30 days after the bill’s enactment; name the Direct File program as an example of unlawful preparation; and bar the U.S. Treasury Department and IRS from circumventing the rule by contracting with or awarding grants to third parties to operate such a program, unless explicitly authorized by Congress, the bill summary says.
“This is one more step in the Democrat agenda to appoint the IRS as preparer, filer, and auditor of American taxpayers,” Sen. Daines said. “The IRS Direct File program is unnecessary and unconstitutional, and it should be terminated immediately.”
Under the bill, long-standing programs and functions of the IRS would remain intact, including the Volunteer Income Tax Assistance Program, Tax Counseling for the Elderly, the Free File partnership, fillable forms, and the correction of math errors, states the summary.
“The FAIR PREP Act reins in an unauthorized expansion of IRS power and protects taxpayers by keeping tax policy in the hands of lawmakers, where it belongs,” said Sen. Tillis.
Sen. Capito said the program was a solution for a problem that doesn’t exist. “The IRS was not authorized to create this program, and the funds being used to prop it up should be redirected toward improvements for existing issues within the agency,” she said.
The bill has support from Tennessee Attorney General Jonathan Skrmetti, Americans for Tax Reform, Heritage Action, the National Taxpayers Union, the Taxpayers Protection Alliance, and the Center for a Free Economy.