Months after ending its Direct File pilot, the Internal Revenue Service (IRS) is moving to refresh the technology used by its volunteer tax preparation programs, issuing a draft solicitation for a new long-term software contract.
In a draft posted to SAM.gov on Monday, the IRS said it plans to award a single-vendor, firm-fixed-price Indefinite Delivery, Indefinite Quantity contract. The deal includes a 12-month base period starting in June and four one-year option periods extending through spring 2031, with a guaranteed minimum of 8,500 software licenses per year if the options are exercised.
The software must be fully online by the beginning of the 2026 filing season and comply with IRS policies.
The software supports the IRS’s Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs, which connect low-income and elderly taxpayers – generally those earning under $84,000 – with roughly 96,000 IRS-certified volunteer tax preparers who help eligible participants file their taxes for free.
The IRS said in its draft that the software would need to support accurate and secure e-file federal and state returns across 12,000 different sites worldwide.
The request for updated software follows the IRS’s termination of its Direct File program in November, after Republicans’ fiscal spending bill passed last summer directed the agency to find a Direct File replacement. Republicans cited a Treasury Department report that suggested the IRS instead invest its resources in other no-cost tax preparation programs, including its volunteer-based offerings.
In its draft, the IRS said the software must be available with minimal configuration or customization to meet agency security and privacy requirements. It also must be user-friendly for “preparers with varying degrees of experience,” including tax professionals and non-tax professionals.
The IRS said the vendor needs to provide high-availability operations, disaster recovery, strict help desk service level agreements, user training, and recurring management reporting under IRS security and privacy requirements.
The IRS is also pushing for a fast handoff, calling for a transition-in period of up to 180 days to stand up operations and keep tax season services running without disruption.