H.R. 7806

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7806 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7806

To amend the Internal Revenue Code of 1986 to codify the Direct File 
program.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

March 4, 2026

Mr. Sherman (for himself, Mr. Beyer, Mr. Hoyer, Ms. Chu, Mr. Pocan, Mr. 
Aguilar, Mr. Amo, Ms. Adams, Ms. Balint, Ms. Barragan, Mrs. Beatty, Ms. 
Bonamici, Ms. Brownley, Mr. Carson, Mr. Casten, Ms. Castor of Florida, 
Mrs. Cherfilus-McCormick, Mr. Cisneros, Ms. Clarke of New York, Mr. 
Cohen, Mr. Conaway, Mr. Costa, Mr. Davis of Illinois, Ms. Dean of 
Pennsylvania, Ms. DeGette, Ms. DeLauro, Ms. DelBene, Mr. Deluzio, Ms. 
Dexter, Mr. Doggett, Ms. Elfreth, Mr. Fields, Mrs. Fletcher, Mr. 
Foster, Mrs. Foushee, Ms. Lois Frankel of Florida, Ms. Friedman, Mr. 
Frost, Mr. Garamendi, Mr. Garcia of California, Ms. Garcia of Texas, 
Mr. Garcia of Illinois, Mr. Goldman of New York, Mr. Gomez, Mr. Green 
of Texas, Mrs. Grijalva, Mr. Harder of California, Mrs. Hayes, Mr. 
Himes, Mr. Horsford, Ms. Houlahan, Mr. Huffman, Mr. Ivey, Ms. Jacobs, 
Ms. Jayapal, Mr. Johnson of Georgia, Ms. Kelly of Illinois, Mr. Kennedy 
of New York, Mr. Khanna, Mr. Landsman, Mr. Larsen of Washington, Mr. 
Latimer, Ms. Lee of Pennsylvania, Mr. Lynch, Mr. Mannion, Ms. Matsui, 
Ms. McBride, Mrs. McClain Delaney, Ms. McClellan, Ms. McCollum, Ms. 
McDonald Rivet, Mr. McGovern, Mrs. McIver, Mr. Menendez, Mr. Mfume, Mr. 
Moulton, Mr. Mullin, Ms. Norton, Ms. Ocasio-Cortez, Mr. Olszewski, Ms. 
Omar, Mr. Pallone, Ms. Pingree, Ms. Pressley, Mr. Quigley, Mrs. 
Ramirez, Ms. Randall, Mr. Raskin, Ms. Salinas, Ms. Sanchez, Ms. 
Scanlon, Ms. Schakowsky, Ms. Schrier, Mr. Scott of Virginia, Mr. David 
Scott of Georgia, Ms. Simon, Mr. Smith of Washington, Mr. Soto, Ms. 
Stansbury, Mr. Swalwell, Mr. Takano, Mr. Thanedar, Mr. Thompson of 
Mississippi, Ms. Titus, Ms. Tlaib, Ms. Tokuda, Mr. Tonko, Mrs. Trahan, 
Mr. Suozzi, Mr. Torres of New York, Mr. Vargas, Mr. Veasey, Ms. 
Velazquez, Mr. Vindman, Mr. Walkinshaw, Ms. Wasserman Schultz, Mrs. 
Watson Coleman, Ms. Williams of Georgia, Mr. DeSaulnier, Mr. Correa, 
Mr. Subramanyam, and Ms. Meng) introduced the following bill; which was 
referred to the Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to codify the Direct File 
program.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Direct File Act of 2026''.

SEC. 2. PROHIBITION ON AGREEMENTS RESTRICTING GOVERNMENT TAX 
PREPARATION AND FILING SERVICES.

(a) In General.--The Secretary may not enter into any agreement 
after the date of the enactment of this Act which--
(1) restricts the Secretary's legal right to provide tax 
return preparation services or software or to provide tax 
return filing services,
(2) requires the Secretary to not provide such services or 
software for any period of time, or
(3) conditions any provision of such agreement on the 
Secretary not providing such services or software.
(b) Existing Agreements Voided.--Any agreement described in 
subsection (a) which was entered into on or before the date of 
enactment of this Act shall be void as of the date which is 30 days 
after the date of enactment of this Act.
(c) Definition.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury or the Secretary's 
delegate.

SEC. 3. CODIFICATION OF DIRECT FILE.

(a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 7531. ONLINE TAX PREPARATION AND FILING PROGRAM.

``(a) Establishment of Programs.--The Secretary shall establish and 
operate a program under which taxpayers may prepare and file individual 
income tax returns online.
``(b) Requirements for Online Tax Preparation and Filing Program.--
``(1) In general.--The program described in subsection (a) 
shall--
``(A) be owned by the Federal Government,
``(B) use data contained in the records of the 
Internal Revenue Service to simplify the preparation 
and filing process whenever possible, including by 
seamlessly importing such data into a taxpayer's income 
tax return at the election of the taxpayer,
``(C) be user-tested and employ an interview-based 
filing system through which the taxpayer answers 
applicable questions and the relevant information is 
automatically input into their income tax return,
``(D) use plain language and be made available in 
multiple languages,
``(E) be accessible on mobile devices,
``(F) conform to all guidelines under section 508 
of the Rehabilitation Act of 1973 (29 U.S.C. 794d),
``(G) be displayed in a prominent position on the 
website of the Internal Revenue Service,
``(H) be promoted through a comprehensive mass 
marketing campaign, including engagements with mass 
media such as television, radio, and social media,
``(I) be promoted to taxpayers who are likely to be 
eligible to use such program,
``(J) provide integrated customer support, 
including live chat services, to allow taxpayers to 
receive direct and immediate help from the Internal 
Revenue Service regarding their returns, and
``(K) allow a taxpayer to file a return regardless 
of whether such taxpayer is required to file a return 
for the taxable year.
``(2) Eligibility.--
``(A) In general.--For any taxable years beginning 
after 2027, not less than 50 percent of taxpayers 
residing in participating States shall be eligible to 
use the program described in subsection (a), and the 
Secretary shall continue to expand eligibility for such 
program to the maximum extent possible.
``(B) Participating state.--For purpose of this 
section, the term `participating State' means any State 
which--
``(i) elects to provide State tax return 
filing functionality that is integrated with 
the program described in subsection (a), or
``(ii) does not impose a State income tax.
``(C) Secretarial discretion.--For purposes of 
subparagraph (A) and complying with the requirements 
under such subparagraph, the Secretary may determine, 
in such manner as the Secretary deems appropriate, 
which taxpayers residing in participating States are 
eligible to use the program described in subsection 
(a).
``(3) Report.--No later than August 31, 2027, and annually 
thereafter, the Secretary shall report to Congress on use 
levels and patterns of usage of the program described in 
subsection (a), including--
``(A) data reporting taxpayers' satisfaction levels 
and impressions of the program and plans for how the 
Secretary will improve satisfaction with the program, 
and
``(B) barriers to use and plans for how the 
Secretary will address such barriers.
``(c) Taxpayer Responsibility.--Nothing in this section shall be 
construed to absolve the taxpayer from full responsibility for the 
accuracy or completeness of their return of tax.
``(d) Prohibition on Fees.--No fee may be imposed on any taxpayer 
for the use of any program established under subsection (a).
``(e) State Income Tax Returns.--
``(1) In general.--Subject to any applicable requirements 
under section 6103, as part of the program described in 
subsection (a), the Secretary shall enable taxpayers residing 
in a participating State described in subsection (b)(2)(B)(i) 
to file, in as seamless a manner as possible, any State or 
local income tax returns in conjunction with the filing of 
their Federal income tax return, including through methods such 
as--
``(A) sharing tax return information with State and 
local tax agencies, and
``(B) the establishment of a grant program to 
provide funding to each such participating State for 
the purposes described in paragraph (2).
``(2) Eligibility.--A participating State described in 
subsection (b)(2)(B)(i) shall be eligible to receive $1,000,000 
under the grant program described in paragraph (1)(B) if such 
participating State can demonstrate to the Secretary (pursuant 
to such criteria as the Secretary determines appropriate) that 
the State tax return filing functionality satisfies standards 
which are similar to the standards established for the program 
described in subsection (a).''.
(b) Filing Deadline for Information Returns.--Section 6071(b) of 
such Code is amended--
(1) by striking subsection (b),
(2) by redesignating subsections (c) and (d) as subsections 
(b) and (e), respectively, and
(3) by inserting after subsection (b) (as so redesignated) 
the following new subsections:
``(c) Information Returns Accompanied by Written Statement.--
Returns made under any section of subpart B of part III of this 
subchapter for which a corresponding written statement is required 
(other than returns required to be filed with respect to nonemployee 
compensation) shall be filed on or before the date by which such 
written statement is required to be furnished.
``(d) All Other Electronically Filed Information Returns.--Returns 
made under subpart B of part III of this subchapter which are filed 
electronically and for which no deadline is established under 
subsection (b) or (c) shall be filed on or before March 31 of the year 
following the calendar year to which such returns relate.''.
(c) Clerical Amendment.--The table of sections for chapter 77 of 
such Code is amended by adding at the end the following new item:

``Sec. 7531. Online tax preparation and filing program.''.
(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out the amendments made by this section such sums 
as may be necessary for the period of fiscal years 2026 through 2035.
(e) Effective Date.--The amendments made by this section shall 
apply to returns for taxable years beginning after December 31, 2025.
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