Official Summaries

Fostering Autonomy in Independent Returns by Prohibiting Redundant and Extralegal Programs Act of 2025 or the FAIR PREP Act of 2025

This 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.  

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 451 Introduced in House (IH)]

<DOC>






119th CONGRESS
  1st Session
                                H. R. 451

    To amend the Internal Revenue Code of 1986 to prohibit certain 
activities constituting preparation of tax returns by the Secretary of 
                 the Treasury, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 15, 2025

 Mr. Smith of Nebraska (for himself, Mr. Edwards, Mr. Garbarino, Mrs. 
Miller of West Virginia, Ms. Tenney, Mr. Hern of Oklahoma, Mr. Alford, 
Mr. Buchanan, Mr. Womack, Ms. Van Duyne, and Mr. Bacon) 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 prohibit certain 
activities constituting preparation of tax returns by the Secretary of 
                 the Treasury, and for other purposes.

    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 ``Fostering Autonomy in Independent 
Returns by Prohibiting Redundant and Extralegal Programs Act of 2025'' 
or the ``FAIR PREP Act of 2025''.

SEC. 2. PROHIBITION OF CERTAIN RETURN PREPARATION.

    (a) In General.--Section 6020 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(c) Prohibited Preparation by Secretary.--
            ``(1) In general.--Except as provided in section 6014 and 
        subsections (a) and (b) of this section, the Secretary shall 
        not prepare any return of tax imposed by this title or any 
        claim for refund of tax imposed by this title.
            ``(2) Prohibition of direct file and comparable programs.--
        For purposes of paragraph (1), any return or claim for refund 
        prepared using an electronic tax preparation service operated 
        by the Secretary shall be treated as if such return or claim 
        were prepared by the Secretary.
            ``(3) Qualified return preparation programs and irs free 
        file partnership.--Paragraph (2) shall not apply to any return 
        or claim for refund solely because such return or claim for 
        refund was prepared via, or with the assistance of--
                    ``(A) a qualified return preparation program (as 
                defined in section 7526A(e)), or
                    ``(B) the IRS Free File Program as established by 
                the Internal Revenue Service and published in the 
                Federal Register on November 4, 2002 (67 Fed. Reg. 
                67247), including any subsequent agreements and 
                governing rules established pursuant thereto.
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) Tax return preparation.--
                            ``(i) In general.--The term `prepare' with 
                        respect to any return or claim for refund 
                        means--
                                    ``(I) the completion of any form 
                                and schedule needed to compute and 
                                report any tax imposed by this title or 
                                any claim for refund of such a tax, and
                                    ``(II) the filing of any such 
                                return or claim for refund, regardless 
                                of whether such return or claim is 
                                submitted electronically or on paper.
                        For purposes of the preceding sentence, the 
                        preparation of any portion of a return or claim 
                        for refund shall be treated as if it were the 
                        preparation of such return or claim for refund.
                            ``(ii) Computation and correction of 
                        errors, etc.--
                                    ``(I) In general.--Such term shall 
                                not include any computation authorized 
                                by section 6102 or any other 
                                computation or correction of 
                                mathematical or clerical errors 
                                required or authorized by any provision 
                                of chapter 63.
                                    ``(II) Fillable forms.--Such term 
                                shall not include the provision of 
                                fillable forms by the Secretary merely 
                                because such forms include an automated 
                                calculation feature.
                    ``(B) Electronic tax preparation service.--The term 
                `electronic tax preparation service operated by the 
                Secretary' means the free direct e-file tax return 
                system as established by the Internal Revenue Service 
                and published in the Federal Register on December 15, 
                2023 (88 Fed. Reg. 87057), and September 5, 2024 (89 
                Fed. Reg. 72699), and any successor program of the 
                Internal Revenue Service which provides an electronic 
                tax preparation service option.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to returns filed after the date which is 30 days after the date of the 
enactment of this Act.
    (c) No Inference.--The amendment made by this section shall not be 
construed to create any inference with respect to the authority of the 
Secretary of the Treasury (or any delegate of such Secretary) to 
develop and offer for use any electronic tax filing or tax preparation 
service option, or otherwise engage in the preparation of any return of 
tax or any claim for refund of tax imposed by the Internal Revenue Code 
of 1986, with respect to any taxable year beginning on or before the 
date of the enactment of this Act.

SEC. 3. LIMITATION ON FURTHER EXPENDITURES CIRCUMVENTING CONGRESSIONAL 
              AUTHORITY.

    The Secretary of the Treasury (or any delegate of such Secretary) 
may not award or make payment of grants or enter into or maintain any 
contract, other transaction, or reimbursable agreement for the 
development or operation of an electronic tax preparation service 
option after the date of the enactment of this Act unless otherwise 
authorized by law.
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