Why the IRS Should Automatically Fill In Returns With What It Knows

Posted by Trish Riley, January 24, 2010

“An article in the NY Times begins, “In the digital age, filing income tax returns should be a snap. Important data from employers and financial institutions has already been sent to government computers. Yet taxpayers are still required to perform the chore of preparing a return from scratch, in many cases paying a software company for the privilege.”

Why, if your needs are simple, can’t you just download forms pre-filled with whatever data the IRS has received about you, make any necessary adjustments, and automatically get the IRS calculation of your taxes? Sounds reasonable, but the IRS rejected the President’s proposal to give taxpayers the option to do so as “not feasible at this time” due to delays in the receipt of W-2 and 1099 data. However, California managed to offer a pre-filled state tax return, which cost only 34 cents to process compared to $2.59 to process a traditional paper return. Despite the success of the pilot, meager funds have been allotted for the program due to the strength of its political opponents — principally, Intui — according to the state controller. Intuit argues it would be a “conflict of interest for government to be both tax collector and tax preparer.”

via Slashdot Story | Why the IRS Should Automatically Fill In Returns With What It Knows.