18 April 2019

Why you had to calculate your own taxes

Excerpts from an article in Vox:
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...


  1. A government of the people FOR the people ?
    Lol, imagine paying someone to work out how much I have to pay someone else !!!
    Y'all need to get rid of that lobbying ability, y'all need to sharpen your pitchforks.

  2. From the article : UPDATE: After this post was published, Senate finance ranking member Ron Wyden’s office pushed back on Elliott’s report, saying they’d received confirmation from the IRS chief tax counsel that the bill as written does not bar the IRS from designing their own direct filing product, if they give 12 months’ notice. It’s likely the tax prep industry would challenge the IRS if it tried to do that.

  3. here in Australia we can log into the Australian tax office (equivalent of your IRS) and lodge our yearly tax returns for free. as i only have one job and no investments it is really just a matter of looking over the numbers and ticking a few boxes and its done. takes all of 10 minutes a year

  4. Canada has an arrangement with Turbo Tax in which the gov't pre-populates online tax returns with gov't data; for most people, only specific info such as medical costs would require input.

  5. To be perfectly fair, there is no rational reason whatsoever for the US tax code to be as complicated as it is. Tithe everyone. Flat rate, 10% of income. No deductions, no excuses. Simple as that. Those with less, pay less. Those with more, pay more. But everyone pays the same amount in proportion to what they make. Simple. Obvious. Will never happen.


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