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The Internal Revenue Service has released a new operational roadmap confirming it is moving forward with the largest administrative transformation the agency has undertaken in decades.
This modernization effort is required under the One, Big, Beautiful Bill Act (OBBBA) and centers on automating tax filing for roughly 40 million taxpayers who submit what the IRS classifies as “simple returns.”
Internal planning documents indicate the system is scheduled to be fully active for the 2026 tax filing season, which opens in January 2026. IRS Commissioner Daniel Werfel is expected to formally present the completed strategy to Congress in the coming days.
New “Simple File” System Set to Launch in 2026
At the heart of the reform is the introduction of a new Simple File program. This system is designed for taxpayers who meet clearly defined criteria, including:
- Income limited to W-2 wages
- Modest interest and dividend income
- Use of the standard deduction only
Eligible taxpayers will be identified directly by the IRS and sent a pre-filled tax return toward the end of January or early February.
According to Commissioner Werfel, the initiative is intended to remove unnecessary complexity. He has previously explained that for many Americans, filing taxes should be a straightforward review process rather than a time-consuming reconstruction of financial information.
The IRS already receives most of the required data and plans to use it more effectively to reduce taxpayer effort.
How the IRS Simple File Program Will Function
The Simple File system will be accessed through a secure online portal on IRS.gov. Qualified individuals will receive a mailed notice and also see a notification when signing into their IRS Online Account.
The pre-filled return, officially titled Proposed Form 1040-SF, will include information the IRS already has on record, such as:
- Employer-reported W-2 wage data
- 1099-INT and 1099-DIV income from banks and investment firms
- Basic personal and filing information
- Automatically applied standard deduction
Taxpayers will be able to carefully review the information, make corrections if needed, or add missing income—such as interest from an overlooked account. Filing status adjustments can also be made before submission.
Once everything is verified, the return can be filed electronically with a single confirmation step.
Pilot Program and Voluntary Participation
The program will not require third-party tax software or manual form completion. Built-in payment tools will allow users who owe taxes to pay directly, while refunds can be deposited into an existing bank account or sent by mail.
Participation in Simple File will remain entirely optional. Taxpayers may choose to opt out and file using traditional methods if they prefer.
The IRS estimates that about 40 million returns for the 2025 tax year—roughly 22% of all individual filings—will qualify.
To test the system, a pilot program involving 50,000 volunteers across 13 states is currently running for the 2024 filing season. Findings from this trial will be included in Commissioner Werfel’s final report to lawmakers.
Future Expansion Plans
If the Simple File initiative proves successful, the IRS has outlined additional expansion phases. These could eventually cover:
- Limited Schedule C business income
- Common education tax credits
- Certain retirement savings deductions
The long-term objective outlined in the blueprint is to make voluntary tax compliance simpler, faster, and less burdensome for a wide range of taxpayers.
The IRS Simple File program marks a major shift in how Americans may interact with the tax system starting in 2026. By leveraging data the agency already collects, the IRS aims to streamline filing for millions of people, reduce errors, and save time.
While the program will begin with straightforward tax situations, its success could pave the way for broader automation and a fundamentally easier filing experience in the years ahead.
FAQs
Who will qualify for the IRS Simple File program?
Taxpayers with W-2 income, limited interest or dividends, and who claim the standard deduction are expected to qualify.
When will Simple File be available nationwide?
The IRS plans full implementation for the 2026 tax filing season, beginning in January 2026.
Is participation in Simple File mandatory?
No. The program is completely voluntary, and taxpayers can continue filing through traditional methods.