FAIR PREP Act of 2025
FAIR PREP Act of 2025
Plain Language Summary
# FAIR PREP Act of 2025 – Summary **What the bill would do:** The FAIR PREP Act would prohibit the IRS from preparing federal tax returns or refund claims for taxpayers. Specifically, it would shut down the IRS's Direct File program, which currently allows eligible taxpayers in 25 states to prepare and file their federal tax returns for free through the IRS website. The bill defines "prepare" broadly to include completing tax forms or schedules and filing returns, either electronically or on paper. **Who it affects:** This bill would primarily affect individual taxpayers who currently use or might use the IRS Direct File program—generally lower-income and middle-class filers with straightforward tax situations.
It would also impact the IRS's ability to offer free filing services directly to the public. **Current status:** The bill is currently in committee (S 96, 119th Congress) and was sponsored by Senator Marsha Blackburn (R-TN). The bill's summary text appears incomplete in the provided information, so additional exceptions or provisions may exist that aren't fully detailed here.
CRS Official Summary
Fostering Autonomy in Independent Returns by Prohibiting Redundant and Extralegal Programs Act of 2025 or the FAIR PREP Act of 2025This bill prohibits the Internal Revenue Service (IRS) from preparing federal tax returns or refund claims, with some exceptions. The bill specifically prohibits the preparation of federal income tax returns or refund claims through the IRS’s Direct File program. (The Direct File program currently allows qualified taxpayers in 25 participating states to prepare and electronically file free federal tax returns through a portal on the IRS’s website.)The bill defines prepare with respect to federal tax returns and refund claims as (1) the completion (in whole or in part) of any form or schedule for the purpose of calculating federal taxes or refunds, and (2) the filing (either electronically or on paper) of such federal tax returns or refund claims.However, under the bill, federal and state tax returns and refund claims may be prepared through the IRS’s Free File program (a program that allows certain taxpayers to prepare and file free federal and state income tax returns using third-party tax-preparation software) or the Volunteer Income Tax Assistance grant program (through which the IRS partners with local community organizations to help low-income and disabled individuals and persons with limited English proficiency prepare and file free federal and state income tax returns). Further, the Department of the Treasury may not award grants or enter into contracts or other transactions for the development or operation of an electronic tax preparation service.
Latest Action
Read twice and referred to the Committee on Finance.