Direct File Act of 2026 | ChamberLight

IN COMMITTEE· 119TH CONGRESS

Senate BillS 3948Taxation

Direct File Act of 2026

INTRO FEB 26· LAST ACTION FEB 26

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WHAT THE BILL DOES

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This bill matters because it could significantly change how many Americans file their taxes. If passed, it would guarantee a free, government-provided option, potentially saving taxpayers money they currently spend on tax software or preparers. It aims to simplify the tax filing process by allowing the IRS to use its own data to pre-fill parts of a tax return, making it less confusing and reducing errors.

Without this bill becoming law, the IRS Direct File program might remain a temporary pilot or face legal challenges from existing agreements that prevent the government from offering such services. If it becomes law, it ensures a permanent, expanding, and free service, potentially lowering the barrier for many people to file their taxes accurately and on time, and providing a direct line to IRS help during the filing process.

KEY PROVISIONS

5AI-extracted

PROVISION 01

Prohibits the IRS from making new agreements that restrict its ability to offer tax preparation and filing services, and voids existing agreements within 30 days of the bill becoming law.

This clears the way for the IRS to develop and operate its own free tax filing program without legal obstacles from private companies.

PROVISION 02

Requires the IRS to establish and run a free, online, government-owned program for preparing and filing individual income tax returns.

This makes the IRS Direct File program a permanent service, ensuring taxpayers have a free option directly from the government.

PROVISION 03

Stipulates that the program must be user-friendly, mobile-accessible, offered in multiple languages, use plain language, include customer support with live chat, and use IRS data to simplify filing for taxpayers who choose to import it.

These requirements are designed to make the program accessible and easy for a wide range of taxpayers to use, potentially reducing filing stress and costs.

PROVISION 04

Requires the program to expand eligibility to at least 50% of taxpayers in participating states by tax year 2028, and to continue expanding as much as possible, with provisions for integrated state tax filing.

This ensures the program reaches a broad audience and works towards a more streamlined filing process that could include both federal and state taxes in one place.

PROVISION 05

Changes filing deadlines for certain electronically filed information returns from businesses, primarily impacting how and when businesses report certain types of income or transactions to the IRS.

This is a technical update to tax reporting rules that could affect how businesses manage their administrative tasks related to tax compliance.

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ACTION TIMELINE

2 EVENTS

FEB 26

Introduced in Senate

INTROREFERRAL

FEB 26

Read twice and referred to the Committee on Finance.

INTROREFERRAL

BILL INFO

TypeSenate Bill

NumberS 3948

Congress119th

StatusIn Committee

IntroducedFeb 26, 2026

Last actionFeb 26, 2026

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IN COMMITTEE· 119TH CONGRESS · FINANCE COMMITTEE · INTRODUCED FEB 26, 2026

Senate BillS 3948Taxation

Direct File Act of 2026

INTRODUCED FEB 26, 2026· LAST ACTION FEB 26, 2026

PASSAGE CHANCES

—%

READING

6 min

COSPONSORS

COMPLEXITY

Moderate

Call my reps Congress.gov

LEGISLATIVE PROGRESS

STEP 2 OF 8

Introduced

In Committee

Reported

Passed Senate

Passed House

Conference

To President

Became Law

Introduced
In Committee
Reported
Passed Senate
Passed House
Conference
To President
Became Law

WHAT THE BILL DOES

AI-written

KEY PROVISIONS

AI-extracted

high

Prohibits the IRS from making new agreements that restrict its ability to offer tax preparation and filing services, and voids existing agreements within 30 days of the bill becoming law.

This clears the way for the IRS to develop and operate its own free tax filing program without legal obstacles from private companies.

high

Requires the IRS to establish and run a free, online, government-owned program for preparing and filing individual income tax returns.

This makes the IRS Direct File program a permanent service, ensuring taxpayers have a free option directly from the government.

high

These requirements are designed to make the program accessible and easy for a wide range of taxpayers to use, potentially reducing filing stress and costs.

med

This ensures the program reaches a broad audience and works towards a more streamlined filing process that could include both federal and state taxes in one place.

low

Changes filing deadlines for certain electronically filed information returns from businesses, primarily impacting how and when businesses report certain types of income or transactions to the IRS.

This is a technical update to tax reporting rules that could affect how businesses manage their administrative tasks related to tax compliance.

DEADLINES & DATES

AI-extracted

An AI model extracted this from the bill’s official record and can make mistakes. Check the official text ↗ (opens in new tab)

30 days after the date of enactment of this Act

Existing agreements restricting IRS tax preparation and filing services become void.

After the date of enactment of this Act

New agreements restricting IRS tax preparation and filing services are prohibited.

For any taxable years beginning after 2027

Eligibility for the Direct File program must cover at least 50% of taxpayers residing in participating States.

No later than August 31, 2027, and annually thereafter

The Secretary must report to Congress on use levels and patterns of the program, including satisfaction, impressions, barriers, and plans for improvement.

FUNDING & AUTHORIZATIONS

AI-extracted

An AI model extracted this from the bill’s official record and can make mistakes. Check the official text ↗ (opens in new tab)

AMOUNT	PROGRAM	TYPE	YEARS
$1,000,000	Grant program for participating States to integrate state tax filing functionality with the Direct File program	mandatory	Not specified

GLOSSARY

AI-written

Codify: To organize and write laws into a formal code; in this context, it means to make the Direct File program a permanent part of the federal tax law.
Internal Revenue Code of 1986: The primary body of federal tax law in the United States.
Direct File program: An online service developed and operated by the Internal Revenue Service (IRS) that allows individual taxpayers to prepare and file their federal income tax returns for free.
Secretary: Refers to the Secretary of the Treasury, who oversees the Internal Revenue Service (IRS), or their designated representative.
Taxable year: The annual accounting period for which income tax returns are filed, usually a calendar year for individuals.
Information returns: Forms filed with the IRS by businesses or financial institutions to report certain types of payments made to individuals or other businesses (e.g., W-2s, 1099s).
Section 508 of the Rehabilitation Act of 1973: A federal law that requires federal agencies to make their electronic and information technology accessible to people with disabilities.

ACTION TIMELINE

2 EVENTS

FEB 26

Introduced in Senate

INTROREFERRAL

FEB 26

Read twice and referred to the Committee on Finance.

INTROREFERRAL

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Direct File Act of 2026

LEGISLATIVE PROGRESS

WHAT THE BILL DOES

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ACTION TIMELINE

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Direct File Act of 2026

LEGISLATIVE PROGRESS

WHAT THE BILL DOES

KEY PROVISIONS

DEADLINES & DATES

FUNDING & AUTHORIZATIONS

GLOSSARY

ACTION TIMELINE

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