IN THE SENATE OF THE UNITED STATES
April 13, 2016
Ms. Warren (for herself, Mrs. Shaheen, Ms. Baldwin, Mr. Sanders, Mr. Franken, Mr. Udall, Mr. Whitehouse, Mr. Markey, and Mr. Leahy) introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to establish a free online tax preparation and filing service and programs that allow taxpayers to access third-party provided tax return information.
This Act may be cited as the
Tax Filing Simplification Act of 2016.
Prohibition on agreements restricting Government tax preparation and filing services
The Secretary of the Treasury, or the Secretary's delegate, may not enter into any agreement after the date of the enactment of this Act which restricts the Secretary's legal right to provide tax return preparation services or software or to provide tax return filing services.
Government-assisted tax preparation and filing services
Chapter 77 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
Government-assisted tax-return preparation programs
Establishment of programs
The Secretary shall establish and operate the following programs:
Online tax preparation and filing software
Not later than January 31, 2018, software for the preparation and filing of individual income tax returns for taxable years beginning after 2016.
Taxpayer Data Access
Not later than March 1, 2018, a program under which taxpayers may download third-party provided return information relating to individual income tax returns for taxable years beginning after 2016.
Tax return preparation
Not later than March 1, 2018, a program under which eligible individuals (as defined under subsection (c)(1)) may elect to have income tax returns for taxable years beginning after 2016 prepared by the Secretary.
Requirements for Taxpayer Data Access Program
Return information under the program established under subsection (a)(2) shall be made available—
not later than 15 days after the Secretary receives such information, and
through a secure function that allows a taxpayer to download such information from the Secretary's website in both a printable document file and in a computer-readable form suitable for use by automated tax preparation software.
Third-party provided return information defined
For purposes of this section, the term third-party provided return information means—
information reported to the Secretary through an information return (as defined in section 6724(d)(1)),
information reported to the Secretary pursuant to section 232 of the Social Security Act, and
such other information reported to the Secretary as is determined appropriate by the Secretary for purposes of the program established under subsection (a)(2).
Tax return preparation
For purposes of the program established under subsection (a)(3)—
Except as provided in subparagraphs (B) and (C), the term eligible individual means, with respect to any taxable year, any individual who—
elects to participate in the program established under subsection (a)(3),
is an unmarried individual (other than a surviving spouse (as defined in section 2(a))) or the head of a household (as defined in section 2(b)),
does not claim any deduction allowed under section 62 for purposes of determining adjusted gross income,
claims the standard deduction under section 63,
claims no deduction under section 151 for any individual who is a dependent (as defined in section 152),
does not file Schedule C, and
has no income other than income from—
wages (as defined in section 3401),
Limitation on eligibility for tax year 2017
With respect to any taxable year beginning in 2017, the term
eligible individual shall only include such populations of individuals described in subparagraph (A) as is determined by the Secretary.
Expansion of eligibility after tax year 2017
At the discretion of the Secretary, with respect to any taxable year beginning after December 31, 2017, the term eligible individual may include populations of individuals who would not otherwise satisfy the requirements established under subparagraph (A), such as married individuals, heads of households, taxpayers who are eligible to claim the earned income tax credit under section 32 and have dependents, taxpayers who are eligible to claim the child tax credit under section 24, taxpayers who claim deductions allowed under section 62 for purposes of determining adjusted gross income, and taxpayers with income from nonemployee compensation.
Not later than August 31, 2019, the Secretary shall submit a report to Congress that contains recommendations for such legislative or administrative actions as the Secretary determines necessary with respect to expanding the populations of individuals that may qualify as eligible individuals for purposes of the program established under subsection (a)(3).
Return must be filed by individual
No return prepared under the program established under subsection (a)(3) shall be treated as filed before the date such return is submitted by the taxpayer as provided under the rules of section 6011.
Verification of identity
An individual shall not participate in any program described in subsection (a) or access any information under such a program unless such individual has verified their identity to the satisfaction of the Secretary.
Nothing in this section shall be construed to absolve the taxpayer from full responsibility for the accuracy or completeness of his return of tax.
Prohibition on fees
No fee may be imposed on any taxpayer who participates in any program established under subsection (a).
Information Provided for Wage and Self-Employment income
For purposes of subsection (a)(2), in the case of information relating to wages paid for any calendar year after 2016 required to be provided to the Commissioner of Social Security under section 205(c)(2)(A) of the Social Security Act (42 U.S.C. 405(c)(2)(A)), the Commissioner shall make such information available to the Secretary not later than February 15 of the calendar year following the calendar year to which such wages and self-employment income relate.
Filing deadline for information returns
Section 6071(b) of such Code is amended to read as follows:
Returns made under part III of this chapter shall be filed on or before January 31 of the year following the calendar year to which such returns relate. Section 6081 shall not apply to returns under such part III.
Conforming amendment to Social Security Act
Section 205(c)(2)(A) of the Social Security Act (42 U.S.C. 405(c)(2)(A)) is amended by adding at the end the following new sentence:
For purposes of the preceding sentence, the Commissioner shall require that information relating to wages paid be provided to the Secretary of the Treasury not later than February 15 of the year following the calendar year to which such wages and self-employment income relate..
The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:
Sec. 7529. Government-assisted tax-return preparation programs.
Authorization of appropriations
There is authorized to be appropriated to carry out the amendments made by this section such sums as may be necessary for each of fiscal years 2017 through 2021.
The amendments made by this section shall apply to returns for taxable years beginning after December 31, 2016.