S.96 - Fostering Autonomy in Independent Returns by Prohibiting Redundant and Extralegal Programs Act of 2025; FAIR PREP Act of 2025 (119th Congress)
Summary
The FAIR PREP Act of 2025 aims to amend the Internal Revenue Code of 1986 to prohibit the Secretary of the Treasury from engaging in certain tax return preparation activities. This bill specifically targets the IRS's direct file program and similar electronic tax preparation services operated by the Secretary. It seeks to limit the Secretary's role to computations authorized by Section 6102, corrections of errors, and the provision of fillable forms.
Expected Effects
If enacted, this bill would prevent the IRS from offering its own free direct e-file tax return system, pushing taxpayers towards using private tax preparation services or relying on existing programs like the IRS Free File Program. It could also limit the IRS's ability to innovate in tax preparation technology.
Potential Benefits
- Potentially stimulates the private sector tax preparation industry.
- Reinforces the role of Congress in authorizing government programs and expenditures.
- May reduce the risk of government overreach into areas traditionally served by the private sector.
- Could lead to more specialized and innovative tax preparation services offered by private companies.
- Focuses IRS resources on core functions like enforcement and taxpayer assistance rather than direct return preparation.
Most Benefited Areas:
Potential Disadvantages
- May increase costs for taxpayers who would have used the free direct file service.
- Could disproportionately affect low-income taxpayers who rely on free tax preparation options.
- Potentially reduces competition in the tax preparation market, leading to higher prices or lower quality services from private providers.
- May hinder the IRS's ability to improve tax compliance through user-friendly filing options.
- Could limit the IRS's ability to gather data and insights into taxpayer behavior, which could inform future policy decisions.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the Constitution centers on the balance of powers between the legislative and executive branches. Article I, Section 1 vests all legislative powers in Congress. This bill asserts congressional authority over the IRS's activities, particularly concerning the expenditure of funds and the creation of programs. By limiting the Secretary of the Treasury's ability to offer tax preparation services without explicit congressional authorization, the bill reinforces Congress's role in overseeing government actions and ensuring accountability.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).