What If The IRS Did Our Taxes For Us?

Experts say the government should precalculate taxes to save us time and money. Others disagree. Here’s what you need to know.

Millions of Americans are breathing a sigh of relief now that Tax Day is behind us again.

Tax season is a pain, but some experts say it doesn’t have to be so complicated.

They say private companies like Intuit, maker of TurboTax, go out of their way to make the tax-filing process complicated. Doing so ensures consumers will buy tax-preparation software.

The New York Times reports that attorney Joseph Bankman, a tax-law professor at Stanford University Law School, is among those experts:

For more than a decade, Mr. Bankman and a small group of tax experts have called on the government to create a tax preparation method that they say would vastly reduce the time and cost of tax-filing for most people. Intuit has been a primary obstacle to the effort.

Bankman says the federal government already has the information it needs to essentially do our taxes for us, which is known as “return-free filing.”

This is because the same employers and financial institutions that send you tax documents like the Form W-2, Form 1o98 or Form 1099 also send another copy to the Internal Revenue Service. The IRS’ copies give the federal agency something to compare our tax filings against to make sure we filed correctly.

To highlight the absurdity of the situation, Bankman asks people to imagine their vehicle registration following the same process as filing taxes. As he tells the Times:

Imagine if the state said, “Go to your car, find your VIN number and then look at this table that has different tax rates to find out how much you owe.” If they did, people would probably need to hire an expert for that too.

Experts like Bankman argue that the IRS instead should use its copies of our tax documents to precalculate taxes for us.

This return-free filing system, the national nonprofit investigative news outlet ProPublica reported last year, “might allow tens of millions of Americans to file their taxes for free and in minutes” — and would be voluntary.

Companies like Intuit disagree. In a statement responding to the article for which the Times interviewed Bankman, Intuit says:

Return-free filing minimizes the taxpayers’ voice and control over the tax process by reducing their role in filing their taxes and getting their own money back,

ProPublica has reported that Intuit has spent millions of dollars lobbying against tax simplification measures like return-free filing, including $2.6 million spent on lobbying in 2013 alone.

Intuit isn’t the only entity against return-free filing, however.

The Times reports that conservatives who are suspicious of the IRS side with the creator of TurboTax. (After all, conservatives like 2016 presidential candidate Ted Cruz, a Republican U.S. senator from Texas, want to abolish the IRS entirely.)

What do you think about having the IRS file your taxes? Sound off in a comment below or on our Facebook page.

Stacy Johnson

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