Tax Filing Simplification Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2297 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. IN THE HOUSE OF REPRESENTATIVES APRIL 12, 2019 Mr. SHERMAN (for himself, Ms. NORTON, Mr. BEYER, Mr. RASKIN, Mr. RYAN, Ms. HILL of California, Ms. OCASIO-CORTEZ, Mr. BLUMENAUER, and Ms. SPEIER) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to establish a free online tax preparation and filing service and pro- grams that allow taxpayers to access third-party provided tax return information. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Tax Filing Simplifica- 4 tion Act of 2019’’. 5 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 2 •HR 2297 IH SEC. 2. PROHIBITION ON AGREEMENTS RESTRICTING GOV- 1 ERNMENT TAX PREPARATION AND FILING 2 SERVICES. 3 The Secretary of the Treasury, or the Secretary’s del- 4 egate, may not enter into any agreement after the date 5 of the enactment of this Act which restricts the Sec- 6 retary’s legal right to provide tax return preparation serv- 7 ices or software or to provide tax return filing services. 8 SEC. 3. GOVERNMENT-ASSISTED TAX PREPARATION AND 9 FILING SERVICES. 10 (a) IN GENERAL.—Chapter 77 of the Internal Rev- 11 enue Code of 1986 is amended by adding at the end the 12 following new section: 13 ‘‘SEC. 7529. GOVERNMENT-ASSISTED TAX-RETURN PREPA- 14 RATION PROGRAMS. 15 ‘‘(a) ESTABLISHMENT OF PROGRAMS.—The Sec- 16 retary shall establish and operate the following programs: 17 ‘‘(1) ONLINE TAX PREPARATION AND FILING 18 SOFTWARE.—Not later than January 31, 2021, soft- 19 ware for the preparation and filing of individual in- 20 come tax returns for taxable years beginning after 21 2019. 22 ‘‘(2) TAXPAYER DATA ACCESS.—Not later than 23 March 1, 2021, a program under which taxpayers 24 may download third-party provided return informa- 25 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 3 •HR 2297 IH tion relating to individual income tax returns for 1 taxable years beginning after 2019. 2 ‘‘(3) VOLUNTARY TAX RETURN PREPARA- 3 TION.—Not later than March 1, 2021, a program 4 under which eligible individuals (as defined under 5 subsection (c)(1)) may elect to have income tax re- 6 turns for taxable years beginning after 2019 pre- 7 pared by the Secretary, with an opportunity for the 8 individual to update such returns after preparation. 9 ‘‘(4) FACILITATING USE OF FEDERAL RETURNS 10 FOR STATE TAX PURPOSES.—Not later than March 11 1, 2021, for States that provide or seek to provide 12 State-level software or programs similar to software 13 described in paragraph (1) or the program described 14 in paragraph (3), a program under which the Sec- 15 retary— 16 ‘‘(A) provides technical assistance, and 17 ‘‘(B) discloses Federal income tax return 18 information under section 6103(c) to facilitate 19 the preparation and filing of State income tax 20 returns. 21 ‘‘(b) REQUIREMENTS FOR TAXPAYER DATA ACCESS 22 PROGRAM.— 23 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 4 •HR 2297 IH ‘‘(1) IN GENERAL.—Return information under 1 the program established under subsection (a)(2) 2 shall be made available— 3 ‘‘(A) not later than 15 days after the Sec- 4 retary receives such information, and 5 ‘‘(B) through a secure function that allows 6 a taxpayer to download such information from 7 the Secretary’s website in both a printable doc- 8 ument file and in a computer-readable form 9 suitable for use by automated tax preparation 10 software. 11 ‘‘(2) THIRD-PARTY PROVIDED RETURN INFOR- 12 MATION DEFINED.—For purposes of this section, the 13 term ‘third-party provided return information’ 14 means— 15 ‘‘(A) information reported to the Secretary 16 through an information return (as defined in 17 section 6724(d)(1)), 18 ‘‘(B) information reported to the Secretary 19 pursuant to section 232 of the Social Security 20 Act, and 21 ‘‘(C) such other information reported to 22 the Secretary as is determined appropriate by 23 the Secretary for purposes of the program es- 24 tablished under subsection (a)(2). 25 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 5 •HR 2297 IH ‘‘(c) TAX RETURN PREPARATION.— 1 ‘‘(1) ELIGIBLE INDIVIDUAL.—For purposes of 2 the program established under subsection (a)(3)— 3 ‘‘(A) IN GENERAL.—Except as provided in 4 subparagraphs (B) and (C), the term ‘eligible 5 individual’ means, with respect to any taxable 6 year, any individual who— 7 ‘‘(i) elects to participate in the pro- 8 gram established under subsection (a)(3), 9 ‘‘(ii) is an unmarried individual (other 10 than a surviving spouse (as defined in sec- 11 tion 2(a)) or the head of a household (as 12 defined in section 2(b))), 13 ‘‘(iii) does not claim any deduction al- 14 lowed under section 62 for purposes of de- 15 termining adjusted gross income, 16 ‘‘(iv) claims the standard deduction 17 under section 63, 18 ‘‘(v) does not file schedule C, and 19 ‘‘(vi) has no income other than income 20 from— 21 ‘‘(I) wages (as defined in section 22 3401), 23 ‘‘(II) interest, or 24 ‘‘(III) dividends. 25 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 6 •HR 2297 IH ‘‘(B) LIMITATION ON ELIGIBILITY FOR 1 TAX YEAR 2020.—With respect to any taxable 2 year beginning in 2020, the term ‘eligible indi- 3 vidual’ shall only include such populations of in- 4 dividuals described in subparagraph (A) as is 5 determined by the Secretary. 6 ‘‘(C) EXPANSION OF ELIGIBILITY AFTER 7 TAX YEAR 2020.— 8 ‘‘(i) IN GENERAL.—At the discretion 9 of the Secretary, with respect to any tax- 10 able year beginning after December 31, 11 2020, the term ‘eligible individual’ may in- 12 clude populations of individuals who would 13 not otherwise satisfy the requirements es- 14 tablished under subparagraph (A), such as 15 married individuals, heads of households, 16 taxpayers who are eligible to claim the 17 earned income tax credit under section 32 18 and have dependents, taxpayers who are el- 19 igible to claim the child tax credit under 20 section 24, taxpayers who claim deductions 21 allowed under section 62 for purposes of 22 determining adjusted gross income, and 23 taxpayers with income from non-employee 24 compensation. 25 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 7 •HR 2297 IH ‘‘(ii) REPORT.—Not later than August 1 31, 2022, the Secretary shall submit a re- 2 port to Congress that contains recommen- 3 dations for such legislative or administra- 4 tive actions as the Secretary determines 5 necessary with respect to expanding the 6 populations of individuals that may qualify 7 as eligible individuals for purposes of the 8 program established under subsection 9 (a)(3). 10 ‘‘(2) RETURN MUST BE FILED BY INDI- 11 VIDUAL.—No return prepared under the program es- 12 tablished under subsection (a)(3) shall be treated as 13 filed before the date such return is submitted by the 14 taxpayer as provided under the rules of section 15 6011. 16 ‘‘(d) VERIFICATION OF IDENTITY.— 17 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 18 an individual shall not participate in any program 19 described in subsection (a) or access any information 20 under such a program unless such individual has 21 verified their identity to the satisfaction of the Sec- 22 retary. 23 ‘‘(2) PROHIBITION.— 24 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 8 •HR 2297 IH ‘‘(A) IN GENERAL.—For purposes of 1 verifying the identity of any individual seeking 2 to participate in any program described in sub- 3 section (a) or to access any information under 4 such a program, the Secretary shall not employ 5 any knowledge-based verification procedures. 6 ‘‘(B) KNOWLEDGE-BASED VERIFICATION 7 PROCEDURE.—For purposes of this paragraph, 8 the term ‘knowledge-based verification proce- 9 dure’ means any procedure for verification of 10 the identity of an individual by means of asking 11 detailed and personal questions for which only 12 that individual is presumed to know the an- 13 swers, including any such procedures which are 14 provided through service agreements with a 15 credit reporting agency. 16 ‘‘(e) TAXPAYER RESPONSIBILITY.—Nothing in this 17 section shall be construed to absolve the taxpayer from 18 full responsibility for the accuracy or completeness of his 19 return of tax. 20 ‘‘(f) PROHIBITION ON FEES.—No fee may be im- 21 posed on any taxpayer who participates in any program 22 established under subsection (a). 23 ‘‘(g) INFORMATION PROVIDED FOR WAGE AND SELF- 24 EMPLOYMENT INCOME.—For purposes of subsection 25 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 9 •HR 2297 IH (a)(2), in the case of information relating to wages paid 1 for any calendar year after 2019 required to be provided 2 to the Commissioner of Social Security under section 3 205(c)(2)(A) of the Social Security Act (42 U.S.C. 4 405(c)(2)(A)), the Commissioner shall make such infor- 5 mation available to the Secretary not later than the Feb- 6 ruary 15 of the calendar year following the calendar year 7 to which such wages and self-employment income relate.’’. 8 (b) FILING DEADLINE FOR INFORMATION RE- 9 TURNS.—Section 6071(b) of such Code is amended to 10 read as follows: 11 ‘‘(b) INFORMATION RETURNS.—Returns made under 12 part III of this chapter shall be filed on or before January 13 31 of the year following the calendar year to which such 14 returns relate. Section 6081 shall not apply to returns 15 under such part III.’’. 16 (c) CONFORMING AMENDMENT TO SOCIAL SECURITY 17 ACT.—Section 205(c)(2)(A) of the Social Security Act (42 18 U.S.C. 405(c)(2)(A)) is amended by adding at the end the 19 following new sentence: ‘‘For purposes of the preceding 20 sentence, the Commissioner shall require that information 21 relating to wages paid be provided to the Secretary of the 22 Treasury not later than February 15 of the year following 23 the calendar year to which such wages and self-employ- 24 ment income relate.’’. 25 VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS 10 •HR 2297 IH (d) CLERICAL AMENDMENT.—The table of sections 1 for chapter 77 of such Code is amended by adding at the 2 end the following new item: 3 ‘‘Sec. 7529. Government-assisted tax-return preparation programs.’’. (e) AUTHORIZATION OF APPROPRIATIONS.—There is 4 authorized to be appropriated to carry out the amend- 5 ments made by this section such sums as may be necessary 6 for each of fiscal years 2020 through 2024. 7 (f) EFFECTIVE DATE.—The amendments made by 8 this section shall apply to returns for taxable years begin- 9 ning after December 31, 2019. 10 Æ VerDate Sep 11 2014 21:51 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H2297.IH H2297 kjohnson on DSK79L0C42 with BILLS