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Dems offer bill directing IRS to create free online tax filing service

A group of Democratic lawmakers announced Friday that they are reintroducing legislation in the House and Senate to instruct the IRS to create its own free, online tax-filing service.

The push comes days after some lawmakers expressed frustration with a bill passed by the House this week that would codify the IRS' partnership with tax-preparation software companies like H&R Block and Intuit, which makes TurboTax.

"Taxpayers waste too many hours and hundreds of dollars on tax preparation each year, which disproportionately burdens low-income and minority taxpayers," Sen. Elizabeth WarrenElizabeth WarrenSenate rejects Sanders minimum wage hike Philly city council calls on Biden to 'cancel all student loan debt' in first 100 days Hillicon Valley: High alert as new QAnon date approaches Thursday | Biden signals another reversal from Trump with national security guidance | Parler files a new case MORE (D-Mass.), a lead sponsor of the Senate version of the bill, said in a statement. "This bill will require the IRS to offer easy, free, online tax-filing for all taxpayers."

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Warren offered the bill along with several other senators, including fellow presidential candidates Sens. Bernie SandersBernie SandersSinema pushes back on criticism of her vote against minimum wage, implying that it's sexist Biden takes victory lap after Senate passes coronavirus relief package Schumer insists Democrats unified after chaotic coronavirus debate MORE (I-Vt.) and Cory BookerCory Booker'Bloody Sunday' to be commemorated for first time without John Lewis It's in America's best interest to lead global COVID-19 vaccine distribution ABC names new deputy political director, weekend White House correspondent MORE (D-N.J.). In the House, the legislation is being reintroduced by Rep. Brad ShermanBradley (Brad) James ShermanBiden can build on Pope Francis's visit to Iraq Bipartisan resolution supports Iranian public amid Biden push to reenter nuclear deal Tributes pour in for Kobe Bryant on one-year anniversary of death MORE (D-Calif.), along with presidential candidate Rep. Tim RyanTimothy (Tim) RyanABC names new deputy political director, weekend White House correspondent Threats to lawmakers up 93.5 percent in last two months Tim Ryan: Prosecutors reviewing video of Capitol tours given by lawmakers before riot MORE (D-Ohio) and freshman Reps. Alexandria Ocasio-CortezAlexandria Ocasio-CortezProgressives won't oppose bill over limits on stimulus checks Bipartisan bill would ban lawmakers from buying, selling stocks The Hill's Morning Report - Presented by Facebook - J&J vax rollout today; third woman accuses Cuomo MORE (D-N.Y.) and Katie HillKatherine (Katie) Lauren HillObamas to attend Biden inauguration Trump pardons George Papadopoulos in latest batch of pardons Former Rep. Katie Hill files lawsuit against ex-husband, Daily Mail over nude photos MORE (D-Calif.).

The legislation, rolled out days before the April 15 tax-filing deadline, includes a number of provisions aimed at simplifying tax filing.

It would direct the IRS to create a free, online tax-preparation and filing service, and bar the agency from entering into agreements that would restrict its ability to offer such a service.

It also would allow taxpayers with simple situations to use a return-free option, under which they would receive a pre-prepared tax return.

To protect taxpayers' identities, the legislation would require taxpayers using a new filing option created by the IRS to verify their identities before accessing tax data.

The legislation has been introduced in past years as well, but may receive new attention this year due to controversy over a bipartisan IRS reform bill that passed the House this week.

The House-passed bill includes a provision to codify the IRS's "Free File" program — an agreement the IRS has in place with tax-prep companies for those companies to offer free software to low- and middle-income taxpayers. Under the current Free File program, the IRS agrees not to offer its own free filing service, though the IRS could terminate the agreement and offer its own service with 12 months' notice.

Some progressive lawmakers, including Hill and Ocasio-Cortez, criticized the Free File provision, arguing that it is the result of corporate influence by the tax-prep companies who want to prevent the IRS from creating its own filing service. Still, the IRS bill with the provision passed the House by voice vote. The measure also included a host of other provisions aimed at modernizing the IRS.

Leading sponsors of the Senate version of the IRS modernization bill dispute that the measure would bar the IRS from creating its own free filing service.