The Direct File Act of 2026 would establish a permanent, government-owned online tax preparation and filing program that allows individual taxpayers to prepare and file their federal income tax returns for free through the IRS. The program would use IRS data to simplify filing, feature an interview-based system with plain language and multiple languages, be accessible on mobile devices, and include live customer support. Starting in 2028, at least 50 percent of taxpayers in participating states would be eligible to use the service, with the IRS required to expand eligibility as much as possible and promote it through mass media campaigns. The bill also allows states that choose to participate to integrate state income tax filing into the federal platform and receive up to $1 million in grants to develop compatible state systems. Additionally, the legislation prohibits the Treasury Department from entering into agreements that restrict its ability to provide tax preparation and filing services, and voids any existing agreements with such restrictions within 30 days of enactment. The bill authorizes necessary funding through fiscal year 2035 and requires the IRS to report annually to Congress on usage patterns and user satisfaction.
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