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 WarrenThe Hill's Campaign Report: Biden chips away at Trump's fundraising advantage Warnock raises almost M in Georgia Senate race in second quarter The Hill's Morning Report - Trump lays low as approval hits 18-month low 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 SandersDemocratic senator will introduce bill mandating social distancing on flights after flying on packed flight Neil Young opposes use of his music at Trump Mt Rushmore event: 'I stand in solidarity with the Lakota Sioux' Democratic strategist Andrew Feldman says Biden is moving left MORE (I-Vt.) and Cory BookerCory Anthony BookerSenators push foreign media to disclose if they are registered as foreign agents Joe Biden must release the results of his cognitive tests — voters need to know GOP senators debate replacing Columbus Day with Juneteenth as a federal holiday MORE (D-N.J.). In the House, the legislation is being reintroduced by Rep. Brad ShermanBradley (Brad) James ShermanHouse passes bill to sanction Chinese banks over Hong Kong security law The Hill's Morning Report - Presented by Facebook - As virus concerns grow, can it get worse for Trump? Black Caucus rallies behind Meeks for Foreign Affairs gavel MORE (D-Calif.), along with presidential candidate Rep. Tim RyanTimothy (Tim) RyanThe Hill's Coronavirus Report: San Francisco Gay Men's Chorus Artistic Director Tim Seelig says choirs are dangerous; Pence says, 'We have saved lives' National Retail Federation hosts virtual 'store tours' for lawmakers amid coronavirus In the next COVID-19 bill, target innovation and entrepreneurship MORE (D-Ohio) and freshman Reps. Alexandria Ocasio-CortezAlexandria Ocasio-CortezDemocratic strategist Andrew Feldman says Biden is moving left Hispanic Caucus asks Trump to rescind invitation to Mexican president Nadler wins Democratic primary MORE (D-N.Y.) and Katie HillKatherine (Katie) Lauren HillGaetz tweets photo of teenage adopted son after hearing battle The Hill's Morning Report - Presented by The American Investment Council - Trump takes his 'ready to reopen' mantra on the road The Hill's Campaign Report: Democrat concedes in California House race 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.