The Government could very easily do most people's tax returns for them, but they aren't allowed to.

[n2doc]

Around this time every year, Joseph Bankman, a professor of tax law at Stanford Law School and a longtime advocate of using technology to simplify tax filing, gets on the phone with reporters to explain what is wrong with how we do our taxes in the United States. Every year he says pretty much the same thing: No other industrialized country asks its citizens to jump through as many hoops to calculate their taxes as ours.

It isn’t just lawmakers or the hapless-seeming Internal Revenue Service that is perpetuating the annoyance of tax time, he adds. Instead it is the private sector — specifically, the software company Intuit, which makes TurboTax, the most popular tax program in the country.

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.


The reform plan would work like this: Today, employers, banks, brokerage firms and pretty much every other financial organization in the country send the federal government detailed records about our economic activity every year. These organizations also send you, the taxpayer, a similar set of documents, which are forms with names like W2 and 1098. After you file your taxes, the government matches its two sets of documents to make sure you have filed correctly.

...
Mr. Ventry said that if return-free filing were operated nationally, tens of millions of people with simple tax situations might have to do just a few minutes of work at tax time every year. The I.R.S. would send them a tax return that had already been filled in with their financial data, and if everything looked in order, they would file it either through the mail or electronically. The return would be completely voluntary. People who disputed the I.R.S.’s calculation would be able to do their taxes the old-fashioned way. Tens of millions of additional taxpayers with more complex returns would be able to save time by downloading all the financial information that the government has collected about them during the year. You would be able to do your return without hunting for every stray W2 or 1099 in your household.

more
http://www.nytimes.com/2015/04/16/technology/personaltech/turbotax-or-irs-as-tax-preparer-intuit-has-a-favorite.html

[snooper2]

1. Yes, lets dumb down the country and make more people stupid

LOL

[n2doc]

2. ??? n/t

[kentauros]

5. No, let's eliminate the need to do our taxes at all.

They already take that money out of our paychecks. Why do we then have to tell them how much they get to keep and how much we have to pay?

Remove the payroll cap, re-calculate the progressive tax-rate to actually lower taxes on most of us, and eliminate the added costs we all go through in order to "do our taxes" every year. Yes, it would probably put many a CPA out of business, but it would also save the federal government heaps of money.

Automate it and let's all forget about this annual mess o' stress.

[snooper2]

7. Do you have a homestead exemption? did you donate anything to charity?

HSA contributions, did you use any money out of your HSA? Did you sell or buy a house in the past year? Did you have a kid?

[kentauros]

8. I knew you (or someone) would bring such issues up.

Recalculate the tax-rate so that it's lower yet still progressive and you would eliminate those or reduce those points. I'd rather ALL taxpayers have lower rates, including those of us that only rent and don't own property, instead of only property owners getting the tax-breaks. Same for those of us that are single. Level the playing field, instead of penalizing those of us that don't play those tax-games.

And I donate money to all sorts of people and programs without ever once asking for a receipt in order to reduce my taxes. That's not really the point of donating.

[Trillo]

9. I think a system that is too complicated for many people to understand

is a great way to dumb folks down. It's like telling them, "You're stupid".

[lostnfound]

3. Free online programs exist for simple situations;including turbotax freedom version for low incomes

Turbotax freedom version is free for people earning up to $30,000 per year including state taxes. Seems accurate and easy to use.

[DetlefK]

4. In Germany, filing taxes is optional.

If you are fine with the "basic" treatment, the records your bank and your employer send to the Finance Ministry are entirely enough.

If you think, you could take advantage of tax-incentives and tax-returns (you should know which ones you qualify for in your business- and family-situation), then you are free to file your taxes personally and claim them.

[tridim]

12. Probably woruldn't work because in America people think their tax return check is free money.

Or at least an excuse to blow a big wad of cash on something you know you can't afford.

[1939]

6. There was an Rep Armey (GOP) solution to this

His solution was that the banks and the dividend payers would be taxed on their payouts and bank interest and dividends would be tax-free to the recipients. The advantage would be that the government and the taxpayers wouldn't be chasing around 1099 forms for interest and dividends and that most individual taxpayers could file a four inch long short form for their taxes. The obvious downside is that this would favor the rich because dividends and interests would then have in effect a flat tax.

[Johonny]

10. So its okay to put the army of accountants out of work so long you don't lose your job

America's new service economy where everyone is out of work, no taxes needed because no one gets paid.

[philosslayer]

11. I think every elected official at the National level should be required to do their own taxes

By hand. Using just the forms. Every Senator, every Representative. And if they mess it up, even the tiniest bit, they should be audited on the spot. You'd see changes so fast it would make your head spin.

[petronius]

13. A year or two ago I forgot to do the worksheet on capital gains, and over-calculated

my tax. I never caught it, but a few months later I got a letter and a check for the correction - it made me think that they actually had redone my tax form for me, in order to catch/fix my mistake, and I wondered why they just didn't do it in the first place since they had all the info (although I guess there could have been income that wasn't reported which would have required my input).

I was thinking last night about how much computer power must be wrapped up in tax work right now; I'm just picturing huge ENIAC-style banks grinding away in the darkness at this mountain of data...