FAIR PREP Act of 2025

2/11/2025, 5:53 AM

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.  

Bill 119 s 96, also known as the "Tax Return Preparer Regulation Act of 2021," aims to make changes to the Internal Revenue Code of 1986 in order to prevent certain activities related to the preparation of tax returns by the Secretary of the Treasury. The bill seeks to establish regulations that would prohibit the Secretary of the Treasury from engaging in activities that could be seen as preparing tax returns.

The purpose of this bill is to ensure that tax return preparers are held to a high standard of professionalism and ethics, and to prevent any potential conflicts of interest that may arise from the Secretary of the Treasury engaging in tax return preparation activities. By establishing clear regulations and guidelines, the bill aims to protect taxpayers and ensure that their tax returns are prepared accurately and in compliance with the law.

Overall, Bill 119 s 96 seeks to improve the integrity of the tax return preparation process and to promote transparency and accountability within the Internal Revenue Service. It is an important piece of legislation that aims to protect taxpayers and uphold the integrity of the tax system.
Congress
119
Number
S - 96
Introduced on
2025-01-15
# Amendments
0
Sponsors
+5
Cosponsors
+5

Variations and Revisions

1/15/2025
Text
PDF
XML

Status of Legislation

Bill Introduced
Introduced to House
House to Vote
Introduced to Senate
Senate to Vote

Purpose and Summary

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.  

Bill 119 s 96, also known as the "Tax Return Preparer Regulation Act of 2021," aims to make changes to the Internal Revenue Code of 1986 in order to prevent certain activities related to the preparation of tax returns by the Secretary of the Treasury. The bill seeks to establish regulations that would prohibit the Secretary of the Treasury from engaging in activities that could be seen as preparing tax returns.

The purpose of this bill is to ensure that tax return preparers are held to a high standard of professionalism and ethics, and to prevent any potential conflicts of interest that may arise from the Secretary of the Treasury engaging in tax return preparation activities. By establishing clear regulations and guidelines, the bill aims to protect taxpayers and ensure that their tax returns are prepared accurately and in compliance with the law.

Overall, Bill 119 s 96 seeks to improve the integrity of the tax return preparation process and to promote transparency and accountability within the Internal Revenue Service. It is an important piece of legislation that aims to protect taxpayers and uphold the integrity of the tax system.
Alternative Names
Official Title as IntroducedA 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.

Comments

Related

Member:  
Shelley Moore Capito
Member:  
Kevin Cramer
Member:  
John Barrasso
Member:  
Marsha Blackburn
Member:  
Thom Tillis
Member:  
Steve Daines
Member:  
James E. Risch
Member:  
Roger Marshall
Member:  
Pete Ricketts
Member:  
Bill Hagerty
Committee:  
Finance

Recent Activity

Latest Summary3/24/2025

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...

Latest Action1/15/2025
Read twice and referred to the Committee on Finance.