July 13, 2022

Senator Warren Leads 22 Colleagues in Introducing the Tax Filing Simplification Act of 2022

Legislation would create free and easy tax filing tools and cut down on the 13 hours and $240 that taxpayers spend on average filing taxes

Text of Bill (pdf)  | One Pager (pdf)

Washington D.C. -  U.S. Senator Elizabeth Warren (D-Mass.) led 22 colleagues in introducing the Tax Filing Simplification Act of 2022, with Representatives Katie Porter (D-Calif.) and Brad Sherman (D-Calif.) introducing the House companion. This legislation would simplify the tax filing process for millions of Americans, saving them hours and hundreds of dollars. Along with lowering costs and eliminating red tape for all taxpayers, simplified filing tools would ensure that more eligible people – including millions of low-income Americans – receive important tax refunds, like the Child Tax Credit and Earned Income Tax Credit. According to recent polling, 77% of Americans support this legislation.

This legislation follows years of issues with the Free File program, which was outsourced by the Internal Revenue Service (IRS) to the tax prep industry and serves just 3% of taxpayers when 70% are eligible. Longtime Free File Alliance member Intuit has been sued for scamming taxpayers into paying for filing services that should have been free, and faced reports of ongoing abuse of revolving door tactics to defend the broken tax filing system. The Government Accountability Office recently recommended that the IRS develop additional options for free online filing, and Treasury Secretary Janet Yellen agreed that investing in truly free and simple tax filing tools like those proposed in this legislation is “definitely a priority." 

“The average American spends 13 hours and $240 every year to file their taxes — that's too much time and too much money. This is the result of corporations like Intuit sabotaging the Free File program to rake in large profits. Congress should pass my Tax Filing Simplification Act, and the IRS itself can and should adopt my plan to simplify the tax filing process for millions of Americans and lower their costs.” said Senator Elizabeth Warren.

“It should be free and easy for Americans to file their taxes; instead, Orange County families have to waste time and money each year,” said Congresswoman Katie Porter, a member of the House Oversight and Reform Committee. “The IRS already has the information it needs to calculate tax liabilities and refunds, but corporate special interests like TurboTax have lobbied Congress for years to allow them to keep abusing taxpayers to line their pockets. Our Tax Filing Simplification Act puts people first and makes government work better for taxpayers.”

“American taxpayers spend too much time and money preparing their tax returns. It doesn’t have to be this way,” said Congressman Brad Sherman, a CPA and Co-Chair of the Bipartisan CPA Caucus. “The Tax Filing Simplification Act represents a common-sense solution to a problem that’s burdened taxpayers for too long -- simplifying the tax filing process with fewer costs and complications. Pleased to team up with Senator Warren and Congresswoman Porter in this effort to help the government work better for the people.”  

“Wisconsin taxpayers waste hours and hundreds of dollars each year on a confusing tax system. It does not have to be this way,” said Senator Tammy Baldwin. “This legislation would offer an easy-to-use online service that would simplify the tax filing and preparation process, saving Wisconsinites time and their hard earned money.”

“This legislation will save taxpayers valuable time and money. Our current system is so confusing  that filers purchase unnecessary third-party programs, forcing them to share their sensitive information and leaving them vulnerable to fraud,” said Senator Richard Blumenthal. “Americans deserve access to simple, free tax preparation and filing services. I’m proud to join my colleagues in introducing this measure to modernize and streamline the burdensome tax filing process.”  

“Granite Staters spend too much time and money filing their taxes—a process that should be simple and free,” said Senator Maggie Hassan. “This bill will ensure that the IRS has a more streamlined system that offers free tax-filing online. I urge my colleagues across the aisle to support this bill, and I will continue working to improve government efficiency.”  

“Every tax season, Americans spend countless hours sifting through complicated tax forms and filing their taxes,” said Senator Tim Kaine. “This legislation is a necessary step to simplifying the tax filing process and ensuring Americans have access to a free online filing service.”

“Far too many Americans struggle with an expensive, complicated, and time-consuming process just to file their taxes,” said Senator Amy Klobuchar. “This common sense legislation will make it easier for Americans to file their taxes while lowering their costs.”

“Seventy percent of Americans qualify for quick, easy, and free tax filing – but a complex and intimidating system for accessing free tax preparation means that millions of families feel forced to spend their precious time and money on third-party tax software,” said Senator Angus King. “The Tax Filing Simplification Act of 2022 would end the third-party chokehold on tax filing and direct the IRS to create their own simple and free online portal where taxpayers can directly enter and file their returns. The bill would also help taxpayers automatically receive and submit the information they need to file their taxes, saving time and reducing the risk of costly errors. This is a long overdue, commonsense step to demystify tax filing, converting a universally-dreaded chore into a straightforward, easy-to-navigate process.” 

“American taxpayers deserve to be able to file their taxes with ease and simplicity,” said Senator Edward J. Markey. “The Tax Filing Simplification Act will lower costs for taxpayers, reduce the time and effort it takes to file taxes, and lessen the stress millions of Americans feel each and every filing season.”

“Taxpayers all over the country are spending too much time and money filing their taxes every spring,” said Senator Jeff Merkley. “This current system is needlessly complicated and costly for everyday Americans. This bill will simplify the process of filing taxes, help keep sensitive information out of the hands of third parties, and will also help save American taxpayers their hard-earned money by providing free, comprehensive guides and resources to help individuals, families, and businesses confidently file their taxes. I look forward to working with my colleagues to get this bill passed.”

“Our tax filing system is a mess. The only people who think it’s working are the private software companies that make millions taking advantage of its complexity,” said Senator Tina Smith. “This legislation will make our system more simple, secure and affordable by directing the IRS to develop a free, online filing service and making existing tax information more readily available for taxpayers.”

“Filing taxes can be stressful and time-consuming for everyone, and for millions of families it stands between them and vital tax credits that can help them pay the bills and save for the future. Simplifying tax filing is critical to lift the burden off families, ensure everyone can access the refundable credits they are owed, and realize the potential of these credits to promote economic security and advance racial and economic equity,” said Megan Martin, Executive Vice President at the Center for the Study of Social Policy.

“The problems caused by an overly complicated tax filing system—the time, expense, and worry that families are faced with each April—should not be a given in this country,” said Susan Harley, Managing Director of Public Citizen’s Congress Watch division. “By implementing reforms to simplify the system such as return-free filing and a government run Free File program, the Tax Filing Simplification Act would ensure the IRS takes swift action to provide filers with a better experience while lessening the chances they make the small, well-meaning mistakes that tie up the IRS’ resources.” 

The Tax Filing Simplification Act makes several commonsense changes to simplify and decrease the costs of the tax filing process for millions of American taxpayers by:  

  • Prohibiting the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services.
  • Directing the IRS to develop a free, online tax preparation and filing service that would allow all taxpayers to prepare and file their taxes directly with the federal government instead of being forced to share private information with third parties.
  • Enhancing taxpayer data access by allowing all taxpayers to download third-party-provided tax information that the IRS already has into a software program of their choice, saving time and decreasing the risk of math errors on W-2 income or CTC payments that lead to significant processing delays.
  • Directing the IRS to expand the CTC non-filer tool to cover other tax benefits, especially the EITC.
  • Allowing eligible taxpayers with simple tax situations to choose a return-free option, which provides a pre-prepared tax return with income tax liability or refund amount already calculated.
  • Mandating that these data and filing tools be made available through a secure online function and requires any participating individual to verify his or her identity before accessing tax data.
  • Reducing tax fraud by getting third-party income information to the IRS earlier in the tax season, allowing the agency to cross-check this information before issuing refunds.
  • Directing the IRS to expand the CTC non-filer tool to cover other tax benefits, especially the EITC, by March 1, 2023.

This bill is cosponsored by Senators Tammy Baldwin (D-Wisc.), Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Bob Casey (D-Pa.), Tammy Duckworth (D-Ill), Diane Feinstein (D-Calif.), Kirsten Gillibrand (D-N.Y.), Maggie Hassan (D-N.H.), Mazie Hirono (D-Hawaii), Tim Kaine (D-Va.), Angus King (D-Maine), Amy Klobuchar (D-Minn.), Patrick Leahy (D-Vt.), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), Alex Padilla (D-Calif.), Bernie Sanders (I-Vt.), Brian Schatz (D-Hawaii), Jeanne Shaheen (D-N.H.), Tina Smith (D-Minn.), Debbie Stabenow (D-Mich.), and Sheldon Whitehouse (D-R.I). 

The bill is endorsed by the following national groups: Center for the Study of Social Policy, Children's Defense Fund, Public Citizen, AFL-CIO, Alliance for a Just Society, American Family Voices, American Federation of State, County and Municipal Employees (AFSCME), American Federation of Teachers, American-Arab Anti-Discrimination Committee (ADC), Americans for Democratic Action (ADA), Americans for Financial Reform, Americans for Tax Fairness, Blue Future, Center for American Progress, Center for Disability Rights, Center for Economic and Policy Research, Center for Law and Social Policy (CLASP), Center for New Revenue, Children's HealthWatch, Coalition on Human Needs, CommonDefense.us, Community Change Action, Consumer Action, DemCast USA, Economic Policy Institute, Economic Security Project Action, Fayetteville Police Accountability Community Taskforce, Food Research & Action Center, Futures Without Violence, Humanity Forward, ideas42, In the Public Interest, Income Movement, Institute for America's Future, Institute for Policy Studies- Program on Inequality, Institute on Taxation and Economic Policy, ISAIAH (MN), Jain Family Institute (JFI), Jobs With Justice, Main Street Alliance, MANA, A National Latina Organization, Missionary Oblates of Mary Immaculate JPIC, MomsRising, MoveOn, National Association of Hispanic Elderly, National Association of Social Workers, National Black Justice Coalition, National Coalition for Asian Pacific American Community Development (CAPACD), National Community Action Partnership, National Consumer Law Center (on behalf of its low income clients), National Diaper Bank Network, National Employment Law Project, National Immigration Law Center, National LGBTQ Task Force Action Fund, National NeighborWorks Association, National Network for Arab American Communities, National Organization for Women, National Resource Center on Domestic Violence, National Women's Law Center, NETWORK Lobby for Catholic Social Justice, Our Revolution, Oxfam America, ParentsTogether Action, Partnership for America's Children, Public Good Law Center, Responsible Wealth, RESULTS, RootsAction.org, Share Our Strength, Sojourners, State Revenue Alliance, Take On Wall Street, The Arc of the United States, Unitarian Universalists for Social Justice, United Church of Christ Justice and Local Church Ministries, United for a Fair Economy, Universal Income Project, and Women’s March.

Senator Warren has long fought on behalf of taxpayers to make it easier and cheaper to file their taxes:

  • In June 2022, Senator Warren and Representatives Brad Sherman, and Katie Porter sent a letter to the Inspector Generals of the Treasury, IRS, and FTC raising concerns about Intuit’s reported abuse of the revolving door and the company's hiring of former federal regulators and influence-peddlers to defend its shady business practices. The lawmakers called out Intuit for forcing taxpayers to pay for services that should be free and requested an in-depth investigation into the company. 
  • During an exchange of the United States Senate Finance Committee in June 2022, U.S.Treasury Secretary Janet Yellen agreed with Senator Warren on the need to create a free tax filing system that actually works for Americans. 
  • In April 2022, Senator Warren and Representatives Sherman and Porter sent a letter to Intuit regarding the company’s unethical use of the revolving door to hire former regulators to defend their shady business practices that scam taxpayers out of billions of dollars. 
  • In April 2022, Senator Warren and Representative Judy Chu (D-Calif.) sent a letter to Secretary Yellen and IRS Commissioner Charles Rettig expressing concerns about higher IRS tax audit rates for low-income Americans. The lawmakers called on the IRS to cease this unfair practice and asked for information regarding their audit rates on low-income Americans and their plans to make the audit data accessible to the public. 
  • In February 2022, Senator Warren and Representative Pramilla Jayapal (D-Wash.) sent a letter to the Acting Inspector General of the Department of Treasury and the Treasury Inspector General for Tax Administration, calling on them to open an investigation into the unethical revolving door between the world’s largest accounting firms and the Treasury Department and IRS. 
  • In May 2021, Senator Elizabeth Warren introduced the Restoring the IRS Act of 2021, which would provide the IRS with the resources it needs to go after wealthy tax cheats and close the tax gap.