Thinking about filing a tax return gives most people a major headache. First you have to collect the right documents from your employer and others. Then you have to figure out which deductions you can claim and which numbers to put on which lines to come up with a final answer of how much you owe or how much you should expect to get back.
Imagine, now, a world without this tedious and confusing process. Imagine instead that each year, the IRS collected your financial information as it normally does and then simply told you what you owe or should expect back. Would you support this new method or be skeptical of a possible conflict of interest?
Some tax experts are interested in seeing a shift in the way taxes are handled in the U.S. They believe that the government has the ability to dramatically reduce the complexity of filing your taxes whether in the form of the scenario we just described (known as return-free filing) or in another way. Among industrialized countries, they say, the U.S. has the most complicated processes for filing a tax return.
Tax preparers, of course, are not in favor of this idea. Intuit, the company that makes TurboTax, appears to be the most invested in stopping any change in the tax filing process. The company has invested close to $13 million in federal lobbying to make sure the government never switches to return-free filing.
While the tax experts argue that return-free filing would ease the process and could even result in more tax breaks for individuals, Intuit and others say that the government should not be allowed to collect taxes and determine what you have to pay. What do you think?
Source: The New York Times, “Would You Let the I.R.S. Prepare Your Taxes?” Farhad Manjoo, April 15, 2015