Congress is set to make it illegal for the IRS to create free tax preparation software, software that could save millions of Americans from wasting their money on TurboTax, H&R Block, and other tax preparers currently profiting from the IRS’s failure to help taxpayers.ProPublica’s Justin Elliott reported that the Taxpayer First Act, sponsored in the House by Democratic Rep. John Lewis (GA) and Republican Mike Kelly (PA), and in the Senate by Finance Committee Chair Chuck Grassley (R-IA) and Ron Wyden (D-OR), would prohibit the IRS from creating an online tax preparation system that would compete with TurboTax and H&R Block...The IRS could prepare taxes automatically for the vast majority of Americans for whom it has all the required information. The bill, Elliott reports, would bar the IRS from the much more moderate step of creating software that competes with TurboTax...It is a huge scandal that Congress has not yet instructed the IRS to automatically prepare taxes for the vast majority of Americans. The IRS has all the information required to do that for all but a few taxpayers, and the main reason it hasn’t to date is lobbying by companies like TurboTax and H&R Block...In a way, creating a free online tax preparation program, as this bill would ban the IRS from doing, is the absolute least the federal government should be doing for you. There is little preventing the IRS from preparing tax returns on its own for most Americans...If I’m not itemizing deductions (like 70 percent of taxpayers), the IRS has all the information it needs to calculate my taxes, send me a filled-out return, and let me either send it in or do my taxes by hand if I prefer.This isn’t a purely hypothetical proposal. Countries like Denmark, Sweden, Estonia, Chile, and Spain already offer “pre-populated returns” to their citizens. The United Kingdom, Germany, and Japan have exact enough tax withholding procedures that most people don’t have to file income tax returns at all, whether pre-populated or not. California has a voluntary return-free filing program called ReadyReturn for its income taxes...So why hasn’t return-free filing happened yet? Well, as the current fight in Congress suggests, the short answer is lobbying, and in particular lobbying by companies like Intuit...
18 April 2019
Why you had to calculate your own taxes
Excerpts from an article in Vox: