FAIR PREP Act of 2025
2/13/2025, 6:53 AMSummary of Bill HR 451
Bill 119 HR 451 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 prohibit the Secretary of the Treasury from engaging in activities that involve preparing tax returns for individuals or businesses. This is intended to ensure that tax preparation services are left to private individuals and businesses, rather than being provided by government officials.In addition to prohibiting the Secretary of the Treasury from preparing tax returns, the bill also includes provisions for other purposes. These additional purposes are not specified in the summary, but may include measures to improve tax compliance, simplify the tax code, or enhance taxpayer protections.
Overall, Bill 119 HR 451 is focused on restricting the role of the Secretary of the Treasury in tax return preparation and may have broader implications for tax policy and administration. It is important to note that the bill is still in the early stages of the legislative process and may undergo changes before being enacted into law.
Congressional Summary of HR 451
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.
