Rep. Sherman Introduces Direct File Act to Make Free IRS Tax Filing Permanent
The program focuses on individual income tax returns, so sole proprietors with simple filings could eventually benefit from free filing. However, most small business owners with complex tax situations would likely still need professional software or accountants. The bill could also hurt small tax preparation businesses that serve individual filers by offering a free government alternative.
“a program under which taxpayers may prepare and file individual income tax returns online”
Referred to the House Committee on Ways and Means.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
No votes have been recorded for this legislation yet.
A new TIGTA report found that the IRS's actual costs for the Direct File program were significantly lower than initial estimates. The report comes as Democrats introduce legislation to revive the program, which was suspended despite growing popularity and lower-than-expected operational costs.
The Direct File Act of 2026 (S. 3948) proposes codifying the Direct File program, allowing taxpayers to file federal returns online directly with the government. Key features include an interview-based format, mobile optimization, and integrated live chat support from the IRS.
A group of Senate and House Democrats is introducing legislation that would bring back the Direct File free tax preparation program that was recently ended by the Trump administration. The act would reverse the decision and codify the program, directing the IRS to operate a free online system.
Document Type
Congressional Bill
Official Title
Direct File Act of 2026
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