Blackburn, Colleagues Introduce Bill to Dismantle Unlawful IRS Direct File Program

WASHINGTON, D.C. - Today, U.S. Senators Marsha Blackburn (R-Tenn.), Steve Daines (R-Mont.), Thom Tillis (R-N.C.), Pete Ricketts (R-Neb.), Jim Risch (R-Idaho), Shelley Moore Capito (R-W.Va.), and Roger Marshall (R-Kan.) as well as Representatives Adrian Smith (R-Neb.) and Chuck Edwards (R-N.C.) released the following statements on introduction of their Fostering Autonomy in Independent Returns by Prohibiting Redundant and Extralegal Programs (FAIR PREP) Act.

This legislation would end the Biden-Harris Internal Revenue Service's (IRS) blatant overreach by terminating its unauthorized "Direct File" tax filing program. By further barring the agency from unlawfully preparing taxpayer returns without congressional approval, the bill would establish crucial safeguards to prevent future attempts to sidestep Congress.

"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," said Senator Blackburn. "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."

"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 Representative Smith. "Notwithstanding its poor record of customer service, the agency tasked with collecting federal revenue simply should not have the power to predetermine and dictate to hardworking Americans what they owe in taxes. This bill would protect Americans from further overreach and unnecessary audits while leaving existing free tax filing options intact. I thank Rep. Edwards, Sen. Blackburn, and my other colleagues for working with me to champion this legislative solution."

"Without congressional approval, the Biden administration wasted millions of taxpayer dollars standing up the Direct File program, only for the program to have a less than 1 percent use rate last tax season," said Representative Edwards. "The IRS already offers a free tax filing program, called Free File, in partnership with private tax preparation companies. Instead of spending taxpayer dollars on a duplicative program, the IRS should be putting its resources toward better customer service and tax processing for the American people."

"This is one more step in the Democrat agenda to appoint the IRS as preparer, filer, and auditor of American taxpayers," said Senator Daines. "The IRS Direct File program is unnecessary and unconstitutional, and it should be terminated immediately."

"The IRS decision to expand the untested Direct File program is a short-sighted decision that will cost the taxpayers millions of dollars," said Senator Thom Tillis. "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."

"Last year, Biden's IRS launched the unauthorized 'Direct File' pilot program," said Senator Ricketts. "In assuming the right to prepare and audit taxes, the IRS created a major conflict of interest. The FAIR PREP Act will fix that. This bill will prohibit the IRS from moving forward with the program without Congressional approval and protect taxpayers' freedom from government overreach."

"The IRS' Direct File program is costly, unnecessary, and unconstitutional," said Senator Risch. "The FAIR PREP Act prevents the IRS from railroading Congressional authority, and allows Idahoans to file their taxes as they see fit."

"Unfortunately, this program was a solution for a problem that doesn't exist in a universe where free filing options are already available for millions of Americans. 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. By passing the FAIR PREP Act, we can reassert Congressional authority, demand accountability and oversight, and restore institutional integrity for the taxpayers of our nation," said Senator Capito.

"The IRS-without any authorization from Congress-is spending tens of millions of taxpayer dollars to create and operate a program that already exists in a more efficient form in the private sector," said Senator Marshall. "As our nation faces a crippling national debt crisis, it's imperative we end wasteful, costly, and redundant programs like The Direct File initiative."

This legislation is also co-sponsored by Senators John Barrasso (R-Wyo.), Eric Schmitt (R-Mo.), Bill Hagerty (R-Tenn.), and Kevin Cramer (R-N.D.) and Representatives Andrew Garbarino (R-N.Y.), Claudia Tenney (R-N.Y.), Kevin Hern (R-Okla.), Mark Alford (R-Mo.), Vern Buchanan (R-Fla.), Steve Womack (R-Ark.), Beth Van Duyne (R-Texas), and Carol Miller (R-W.Va.).

BACKGROUND:

• In 2024, the Biden-Harris IRS launched the "Direct File" tax-preparation program without congressional authorization. Roughly 140,000 taxpayers utilized the new filing option - less than 1% of the estimated 19 million eligible taxpayers.

• Last year, Attorneys General from 13 states, including Tennessee, sent a letter to the U.S. Department of Treasury suggesting that the IRS's unilateral decision to create the program was "unnecessary and unconstitutional." Despite low utilization rates and objections from congressional Republicans, the IRS announced that it would make the program permanent.

• The IRS estimates the program could cost up to $249 million annually, diverting resources from addressing longstanding agency shortfalls. Last month, a U.S. Government Accountability Office (GAO) report revealed the agency has already abandoned plans to hire additional staff and is reallocating hundreds of employees from its taxpayer-services account.

FAIR PREP ACT:

• Section 6020 of the Internal Revenue Code provides authority for the IRS to "prepare" or "execute" tax returns in limited, defined circumstances. This legislation would:

• Under this bill, longstanding programs and functions of the IRS would not be prevented, including the Volunteer Income Tax Assistance Program, Tax Counseling for the Elderly, the Free File partnership, fillable forms, and the correction of math errors.

ENDORSEMENTS:

This legislation is endorsed by Tennessee Attorney General Jonathan Skrmetti, Americans for Tax Reform, Heritage Action, National Taxpayers Union, Taxpayers Protection Alliance, and Center for a Free Economy.

"The IRS's unilateral expansion of Direct File illegally exceeded the agency's statutory authority - which is why thirteen state attorneys general pushed back against this power grab. The FAIR PREP Act draws clear lines to ensure the IRS stays in its lane. I am grateful for Senator Blackburn's dedication to solving this problem, protecting Tennessee's interests, and reinforcing constitutional principles with this legislation" - Tennessee Attorney General Jonathan Skrmetti

"The IRS lied to Congress about Direct File and was slapped down by its own internal watch dog for using a bogus analysis. The IRS should not be the tax preparer, collector and auditor. This illegal power grab by the IRS must be stopped. This important bill from Sen. Blackburn and Rep. Smith would prohibit the IRS from creating a Direct File program without consent from Congress. I applaud them for their leadership and Americans for Tax Reform proudly supports this bill." - Grover Norquist, President of Americans for Tax Reform

"Government agencies like the IRS have routinely overstepped their authority and circumvented Congress to unconstitutionally push their own agendas. The IRS's expensive tax filing program wastes taxpayer dollars by being unnecessary, unauthorized, and underutilized. The FAIR PREP Act puts the IRS in its place and returns to Congress its constitutional authority to authorize tax return preparation. Heritage Action supports this common sense legislation and urges members of Congress to hold government agencies accountable."- Ryan Walker, Executive Vice President, Heritage Action

"National Taxpayers Union enthusiastically supports Senator Blackburn's FAIR PREP Act, which would terminate the IRS's unauthorized Direct File program. The IRS ought to be focused on improving customer service and modernizing its outdated technology instead of creating a duplicative tax prep service that could cost taxpayers hundreds of millions of dollars a year." - Brandon Arnold, Executive Vice President, National Taxpayers Union

"TPA enthusiastically applauds Senator Blackburn for introducing the FAIR PREP Act. From bypassing congressional approval to its lack of transparency over costs, the IRS has shown that it is willing to pursue the Direct File program without any oversight or accountability. This legislation would undo the mess of Direct File, protecting American taxpayers from IRS overreach and ensuring that the agency focuses exclusively on its mission of being the nation's tax collector. We urge all members to support this important effort." - Taxpayers Protection Alliance President David Williams

"The tax collector cannot be the tax preparer without a conflict of interest. The IRS wants to collect the maximum amount possible from taxpayers. Tax preparation is supposed to represent the perspective of the taxpayer, who wants to pay only what is legally owed. Getting the IRS into the tax preparation business is like getting the rooster into the hen house business." - Ryan Ellis, President of the Center for a Free Economy

Click here for bill text.

https://www.blackburn.senate.gov/2025/1/issues/jobs-and-economy/blackburn-colleagues-introduce-bill-to-dismantle-unlawful-irs-direct-file-program