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 Ann WarrenAbigail Disney: 'We're creating a super-class' of rich people Is Big Tech biased? The Hill's Morning Report - In exclusive interview, Trump talks Biden, Iran, SCOTUS and reparations 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."


Warren offered the bill along with several other senators, including fellow presidential candidates Sens. Bernie SandersBernie SandersThe Hill's Morning Report - In exclusive interview, Trump talks Biden, Iran, SCOTUS and reparations Biden to debate for first time as front-runner Rules for first Democratic primary debates announced MORE (I-Vt.) and Cory BookerCory Anthony BookerBiden to debate for first time as front-runner Rules for first Democratic primary debates announced Press: Democrats form circular firing squad MORE (D-N.J.). In the House, the legislation is being reintroduced by Rep. Brad ShermanBradley (Brad) James ShermanFacebook's crypto experiment will languish on Capitol Hill Who are the House Democrats backing Trump impeachment? Lawmakers reintroduce bipartisan IRS bill with 'Free File' provision removed MORE (D-Calif.), along with presidential candidate Rep. Tim RyanTimothy (Tim) John RyanRules for first Democratic primary debates announced What do millennials want? 2020 Democrat: 'My DM's are open and I actually read & respond' MORE (D-Ohio) and freshman Reps. Alexandria Ocasio-CortezAlexandria Ocasio-CortezLawmakers 'failed us' says ICE chief Pelosi, Democratic leaders seek to quell liberal revolt over border bill Bronx restaurants thank Ocasio-Cortez for her endorsements MORE (D-N.Y.) and Katie HillKatherine (Katie) Lauren HillTensions with Iran reach new stage over uranium threat Ocasio-Cortez shares verse by the 'Congressional Destiny's Child' in promotion of new birth control legislation Overnight Health Care: Democratic bill would require insurance to cover OTC birth control | House Dems vote to overturn ban on fetal tissue research | New rule aims to expand health choices for small businesses 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.