This legislation, known as the "Direct File Act of 2026," aims to permanently establish and expand the Internal Revenue Service's (IRS) Direct File program . Its primary purpose is to create a free, government-owned online platform that allows taxpayers to prepare and file their individual income tax returns directly with the IRS. This program is designed to simplify the tax filing process by utilizing IRS data to pre-populate returns, offering an interview-based system, and ensuring accessibility across various devices and languages. A key provision of the bill prohibits the Secretary of the Treasury from entering into any agreements that would restrict the government's ability to provide tax preparation and filing services or software, and it voids existing restrictive agreements. The program mandates integrated customer support , including live chat, and requires a comprehensive mass marketing campaign to promote its use. For taxable years beginning after 2027, at least 50 percent of taxpayers in participating states—those integrating state tax filing or having no state income tax—must be eligible, with a directive to expand eligibility further. The bill also facilitates the filing of state and local income tax returns for taxpayers in participating states by enabling seamless integration with the federal Direct File program. This includes sharing tax return information with state agencies and establishing a grant program to support states in developing compatible filing functionalities. Importantly, the legislation explicitly states that no fees may be imposed on taxpayers for using the program, and it requires annual reports to Congress on its usage, satisfaction levels, and plans for improvement.