Direct File Act of 2026
- Bill Number
- H.R. 7806
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-03-04: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-05-15T08:07:50Z
AI-Generated Summary
Purpose This legislation, titled the Direct File Act of 2026, aims to establish a permanent, government-operated online system for preparing and filing federal individual income tax returns at no cost to users. It also prevents the Treasury Department from making deals that limit its ability to offer such services.
Key Provisions
- The bill creates a new section in the Internal Revenue Code requiring the IRS to run an online tax preparation and filing program.
- The program must be government-owned, use existing IRS data where possible, follow an interview format, use plain language in multiple languages, work on mobile devices, meet accessibility standards, appear prominently on the IRS website, include marketing and customer support, and allow filing even if not required.
- Starting after 2027, at least 50 percent of taxpayers in participating states must be eligible, with expansion required where feasible. Participating states are those that integrate their state tax filing or have no state income tax.
- The IRS must submit annual reports to Congress on usage, satisfaction, and barriers.
- No fees may be charged for using the program, and taxpayers remain responsible for the accuracy of their returns.
- The program must allow seamless filing of state income tax returns for participating states, including through data sharing and a $1 million grant program for states that meet similar standards.
- The bill voids any existing agreements that restrict government tax preparation services and prohibits new ones.
- It adjusts deadlines for certain information returns filed with the IRS.
- Funding is authorized for fiscal years 2026 through 2035, with the changes applying to tax years beginning after December 31, 2025.
Significant Changes to Existing Law
- It adds a statutory requirement for the IRS to operate a free online filing program with specific features, moving the Direct File initiative from administrative practice to law.
- It introduces a prohibition on agreements that limit the government's tax preparation role and voids prior such agreements after 30 days.
- It modifies filing deadlines under the Internal Revenue Code for information returns, aligning some with statement due dates and setting others to March 31.
- It creates new grant authority and integration requirements for state tax systems.
Potential Impacts
- On government agencies: The IRS must develop, maintain, and promote the system, handle increased customer support, and manage state integrations, with new reporting duties to Congress.
- On citizens: Taxpayers gain a free, government-provided option for filing returns, potentially simplifying the process for eligible users.
- On states: Those with income taxes can integrate their systems and qualify for grants if standards are met; states without income taxes are automatically included.
- No direct effects on international relations are outlined.
Main Stakeholders Affected
- Individual taxpayers, especially those in participating states.
- The Internal Revenue Service and Treasury Department.
- State tax agencies in states that choose to integrate.
- Congress, through required annual reports.
Notable Legal, Constitutional, or Political Implications
- The bill amends the Internal Revenue Code to mandate specific government services and voids private agreements, which could affect existing contracts.
- It raises questions about the scope of federal authority over tax administration but introduces no explicit constitutional challenges in the text.
- Politically, it formalizes a shift toward greater government involvement in tax filing while including protections for taxpayer responsibility and state flexibility.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (123)
Rep. Beyer, Donald S. [D-VA-8], Rep. Hoyer, Steny H. [D-MD-5], Rep. Chu, Judy [D-CA-28], Rep. Pocan, Mark [D-WI-2], Rep. Aguilar, Pete [D-CA-33], Rep. Amo, Gabe [D-RI-1], Rep. Adams, Alma S. [D-NC-12], Rep. Balint, Becca [D-VT-At Large], Rep. Barragán, Nanette Diaz [D-CA-44], Rep. Beatty, Joyce [D-OH-3], Rep. Bonamici, Suzanne [D-OR-1], Rep. Brownley, Julia [D-CA-26], Rep. Carson, André [D-IN-7], Rep. Casten, Sean [D-IL-6], Rep. Castor, Kathy [D-FL-14], Rep. Cherfilus-McCormick, Sheila [D-FL-20], Rep. Cisneros, Gilbert Ray [D-CA-31], Rep. Clarke, Yvette D. [D-NY-9], Rep. Cohen, Steve [D-TN-9], Rep. Conaway, Herbert C. [D-NJ-3], Rep. Costa, Jim [D-CA-21], Rep. Davis, Danny K. [D-IL-7], Rep. Dean, Madeleine [D-PA-4], Rep. DeGette, Diana [D-CO-1], Rep. DeLauro, Rosa L. [D-CT-3], Rep. DelBene, Suzan K. [D-WA-1], Rep. Deluzio, Christopher R. [D-PA-17], Rep. Dexter, Maxine [D-OR-3], Rep. Doggett, Lloyd [D-TX-37], Rep. Elfreth, Sarah [D-MD-3], Rep. Fields, Cleo [D-LA-6], Rep. Fletcher, Lizzie [D-TX-7], Rep. Foster, Bill [D-IL-11], Rep. Foushee, Valerie P. [D-NC-4], Rep. Frankel, Lois [D-FL-22], Rep. Friedman, Laura [D-CA-30], Rep. Frost, Maxwell [D-FL-10], Rep. Garamendi, John [D-CA-8], Rep. Garcia, Robert [D-CA-42], Rep. Garcia, Sylvia R. [D-TX-29], Rep. García, Jesús G. "Chuy" [D-IL-4], Rep. Goldman, Daniel S. [D-NY-10], Rep. Gomez, Jimmy [D-CA-34], Rep. Green, Al [D-TX-9], Rep. Grijalva, Adelita S. [D-AZ-7], Rep. Harder, Josh [D-CA-9], Rep. Hayes, Jahana [D-CT-5], Rep. Himes, James A. [D-CT-4], Rep. Horsford, Steven [D-NV-4], Rep. Houlahan, Chrissy [D-PA-6] and 73 more
Recent Actions
- 2026-03-04: Referred to the House Committee on Ways and Means.
- 2026-03-04: Introduced in House
- 2026-03-04: Introduced in House
Bill Versions
- Direct File Act of 2026 — issued 2026-03-04 — PDF (9 pages)