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house Bill H.R. 2297

Should the IRS Provide Taxpayers With a Pre-Filled Tax Return?

Argument in favor

Pre-filled returns for the 90% of taxpayers who don’t itemize their tax returns will save Americans time and money. By making it easier to file taxes, they'll also increase the tax filing rate and ensure more people get their returns. Since the current Free File program is used by only 3% of taxpayers, it’s clear that a better free alternative is needed.

John's Opinion
···
06/17/2019
The IRS already has this information so why not? Can’t cheat your taxes anymore? Good. They will already help you complete your taxes on the phone so what’s the beef. Seems anytime people see IRS they think BAD. So get onboard with the smart kids and let your taxes be done for you without paying TurboTax. This is a no-brainer for all non mouth breathing citizens.
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burrkitty's Opinion
···
06/17/2019
It’s absurd that we have to file taxes at all, much less that we have to pay a industry extra money to do something unavoidable. Ever heard of the Tax Complexity Lobby? Seriously. The tax-preparation industry lobbies strenuously against any system that makes taxes easy. The Tax Complexity Lobby, includes big national preparers like H & R Block and tax-prep software companies. Intuit, the maker of the top-selling program TurboTax, has reportedly spent millions over the years to persuade members of Congress to “oppose I.R.S. government tax preparation.” In an annual report, the company warned investors that “government encroachment” — the I.R.S. filling out the forms for you — would be a significant competitive threat, which is why it has to fight the idea. So you do more work, they make more money. Any part of that seem wrong to you? In Japan, you get a postcard in early spring from Kokuzeicho (Japan’s I.R.S.) that says how much you earned last year, how much tax you owed and how much was withheld. If you disagree, you go into the tax office to work it out. For nearly everybody, though, the numbers are correct, so you never have to file a return. What’s going on in these countries — and in many other developed democracies — is that government computers handle the tedious chore of filling out your tax return. The system is called “pre-filled forms,” or “pre-populated returns.” The taxpayer just has to check the numbers. If the agency got something wrong, there’s a mechanism for appeal. Our own Internal Revenue Service could do the same for tens of millions of taxpayers. For most families, the I.R.S. already knows all the numbers — wages, dividends and interest received, capital gains, mortgage interest paid, taxes withheld — that we are required to enter on Form 1040. The I.R.S. sends out a letter called a CP2000 Notice by the millions every year. This is the form that says: You entered $4,311 on Line 9b, but the reports we have on file say the figure should have been $4,756. I get these letters now and then — the revenue service is always right — and it makes me mad. If the government already has all this stuff, why did I have to spend hours digging through receipts and statements and 1099 forms to report what the I.R.S. already knows? Not to mention how much money the government could save by getting tens of millions of uncertain taxpayers out of the filing cabinets and away from the pocket calculators. If you’re paid strictly in wages and, like nearly 70 percent of Americans, you claim the standard deduction rather than itemizing, you’re familiar with the drill: You get a W-2 from your employer listing what you were paid and how much tax was withheld. Next (unless you shell out for pro prep) you fill in some blanks, do some math, squint at a tax table, sign your name, drop the form in the mail, and worry that you screwed it up. And you very well may have—the IRS finds more than two million mistakes every year. These are spotted easily enough, because the IRS got the very same W-2 figures, did the same math, and filled out the same form. All this redundancy can’t really be necessary, right? Sure enough, because return-free filing already exists in such forward-thinking locales as Japan, Denmark, Sweden, and Spain, where the government basically does just what makes sense: they send out a bill for taxes due—or a refund of overpayment—for the recipient to approve. Even here in the U.S., you don’t have to compute your property taxes yourself, so why can’t you just kick back and wait for the IRS to figure out your income tax? The government said it receives the necessary information too late in tax season, they claimed, so a return-free system would delay refunds and anger impatient taxpayers. Which sure sounds like a dodge—is the IRS, the one federal agency even less beloved than the TSA, really afraid people will be mad at it? You’d figure typical deficit-hawk conservatives would be happy to save the money the IRS wastes every year confronting the American taxpayer’s inability to subtract correctly. Ronald Reagan himself endorsed return-free filing in 1985. But small-government zealot Grover Norquist and his group Americans for Tax Reform oppose efforts to streamline the filing system, preferring reforms that “enhance voluntary compliance.” A weaselly phrase, that—no arms would be twisted by offering a return-free option, and completing a 1040 hardly means you’re “volunteering” to pay taxes. The more likely reason for the resistance is that the proposed set-up would make the tax “simplification” Norquist favors—lopping off upper tax brackets, mainly—a much harder sell. If you’re trying to paint U.S. taxation as hopelessly burdensome, the last thing you want to see is the IRS transformed into an agency that just mails Americans a refund check every year. Meanwhile, special-interest groups are in the trenches trying to shoot down return-free pilot plans. In 2005, California adopted a program called ReadyReturn, which allows qualified residents to opt for a pre-completed tax return rather than fill out their own. The state estimates that the new process has saved millions a year in prep fees and about a half a mil in government administrative costs, and taxpayers who’ve used the service are overwhelmingly pleased. Thing is, not many Californians take advantage of it—in 2012, only 90,000 out of the approximately one million eligible—and officials complain they've had a hard time getting the word out. That’s because software manufacturer Intuit, the maker of the prep app TurboTax, wants it that way: according to a 2013 investigation by the nonprofit journalism outfit ProPublica, the company spent more than $3 million in lobbying and campaign contributions between 2005 and 2009 fighting ReadyReturn. Intuit didn’t manage to kill the program outright, but the state’s budget for marketing it was cut to a dinky $10,000. The Tax Complexity Lobby depends on taxes being complex and frustrating to make money. But we the people already pay the IRS to do the work once. Why pay a second time with the money we get to keep for a duplicate effort by the tax prep industry? There is no need.
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jimK's Opinion
···
06/17/2019
Pro’s: ensures that taxpayers who can’t afford to hire CPA’s can claim deductions that they are entitled to, but did not how to claim. Con’s: By making tax filing ”automatic”, people have less reason to get enraged by taxes. They have less reason to challenge how their tax dollars are being used, or to compare their tax burden to “elite” tax payers, who have many ways to cut their tax burden. Also, it can cut IRS costs to correct misfiled returns and collect remaining taxes due.
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Argument opposed

The IRS, in partnership with the major tax preparation companies, already has a Free File program that allows taxpayers making $62,000 or less a year to file their taxes for free. This bill would require the IRS to do more work and may make it necessary to increase the agency’s budget.

Cherie65's Opinion
···
06/17/2019
Redundant. Another government spending bill that really doesn't benefit anyone but a government entity. Stop spending our money on making the bureaucracy larger!
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FAIRtaxGuy's Opinion
···
06/17/2019
No one should ever have to file a return and IRS no longer needs to exist. Just replace all taxes on income with a flat rate, simple, visible sales tax on new goods/services that includes a monthly tax credit option. FAIRtax is the answer. HR 25 in the House. 33 Sponsors/Cosponsors.
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Poli.Sci's Opinion
···
06/17/2019
This only complicates the system that is already filled with “suggestions” to simplify the process. Honestly, going out and buying TurboTax with four licenses on it and sharing that with family or friends is the best way to go. I would gladly spend $50 to get this and it takes less than a half hour with it’s simple guide. There are also free programs out there offered by tax filing services as well. People can take advantage of these programs well before the IRS comes up with a feasible program that costs more money to maintain than it would to go and buy $50 worth of TurboTax.
Like (11)
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    The IRS already has this information so why not? Can’t cheat your taxes anymore? Good. They will already help you complete your taxes on the phone so what’s the beef. Seems anytime people see IRS they think BAD. So get onboard with the smart kids and let your taxes be done for you without paying TurboTax. This is a no-brainer for all non mouth breathing citizens.
    Like (79)
    Follow
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    Redundant. Another government spending bill that really doesn't benefit anyone but a government entity. Stop spending our money on making the bureaucracy larger!
    Like (40)
    Follow
    Share
    It’s absurd that we have to file taxes at all, much less that we have to pay a industry extra money to do something unavoidable. Ever heard of the Tax Complexity Lobby? Seriously. The tax-preparation industry lobbies strenuously against any system that makes taxes easy. The Tax Complexity Lobby, includes big national preparers like H & R Block and tax-prep software companies. Intuit, the maker of the top-selling program TurboTax, has reportedly spent millions over the years to persuade members of Congress to “oppose I.R.S. government tax preparation.” In an annual report, the company warned investors that “government encroachment” — the I.R.S. filling out the forms for you — would be a significant competitive threat, which is why it has to fight the idea. So you do more work, they make more money. Any part of that seem wrong to you? In Japan, you get a postcard in early spring from Kokuzeicho (Japan’s I.R.S.) that says how much you earned last year, how much tax you owed and how much was withheld. If you disagree, you go into the tax office to work it out. For nearly everybody, though, the numbers are correct, so you never have to file a return. What’s going on in these countries — and in many other developed democracies — is that government computers handle the tedious chore of filling out your tax return. The system is called “pre-filled forms,” or “pre-populated returns.” The taxpayer just has to check the numbers. If the agency got something wrong, there’s a mechanism for appeal. Our own Internal Revenue Service could do the same for tens of millions of taxpayers. For most families, the I.R.S. already knows all the numbers — wages, dividends and interest received, capital gains, mortgage interest paid, taxes withheld — that we are required to enter on Form 1040. The I.R.S. sends out a letter called a CP2000 Notice by the millions every year. This is the form that says: You entered $4,311 on Line 9b, but the reports we have on file say the figure should have been $4,756. I get these letters now and then — the revenue service is always right — and it makes me mad. If the government already has all this stuff, why did I have to spend hours digging through receipts and statements and 1099 forms to report what the I.R.S. already knows? Not to mention how much money the government could save by getting tens of millions of uncertain taxpayers out of the filing cabinets and away from the pocket calculators. If you’re paid strictly in wages and, like nearly 70 percent of Americans, you claim the standard deduction rather than itemizing, you’re familiar with the drill: You get a W-2 from your employer listing what you were paid and how much tax was withheld. Next (unless you shell out for pro prep) you fill in some blanks, do some math, squint at a tax table, sign your name, drop the form in the mail, and worry that you screwed it up. And you very well may have—the IRS finds more than two million mistakes every year. These are spotted easily enough, because the IRS got the very same W-2 figures, did the same math, and filled out the same form. All this redundancy can’t really be necessary, right? Sure enough, because return-free filing already exists in such forward-thinking locales as Japan, Denmark, Sweden, and Spain, where the government basically does just what makes sense: they send out a bill for taxes due—or a refund of overpayment—for the recipient to approve. Even here in the U.S., you don’t have to compute your property taxes yourself, so why can’t you just kick back and wait for the IRS to figure out your income tax? The government said it receives the necessary information too late in tax season, they claimed, so a return-free system would delay refunds and anger impatient taxpayers. Which sure sounds like a dodge—is the IRS, the one federal agency even less beloved than the TSA, really afraid people will be mad at it? You’d figure typical deficit-hawk conservatives would be happy to save the money the IRS wastes every year confronting the American taxpayer’s inability to subtract correctly. Ronald Reagan himself endorsed return-free filing in 1985. But small-government zealot Grover Norquist and his group Americans for Tax Reform oppose efforts to streamline the filing system, preferring reforms that “enhance voluntary compliance.” A weaselly phrase, that—no arms would be twisted by offering a return-free option, and completing a 1040 hardly means you’re “volunteering” to pay taxes. The more likely reason for the resistance is that the proposed set-up would make the tax “simplification” Norquist favors—lopping off upper tax brackets, mainly—a much harder sell. If you’re trying to paint U.S. taxation as hopelessly burdensome, the last thing you want to see is the IRS transformed into an agency that just mails Americans a refund check every year. Meanwhile, special-interest groups are in the trenches trying to shoot down return-free pilot plans. In 2005, California adopted a program called ReadyReturn, which allows qualified residents to opt for a pre-completed tax return rather than fill out their own. The state estimates that the new process has saved millions a year in prep fees and about a half a mil in government administrative costs, and taxpayers who’ve used the service are overwhelmingly pleased. Thing is, not many Californians take advantage of it—in 2012, only 90,000 out of the approximately one million eligible—and officials complain they've had a hard time getting the word out. That’s because software manufacturer Intuit, the maker of the prep app TurboTax, wants it that way: according to a 2013 investigation by the nonprofit journalism outfit ProPublica, the company spent more than $3 million in lobbying and campaign contributions between 2005 and 2009 fighting ReadyReturn. Intuit didn’t manage to kill the program outright, but the state’s budget for marketing it was cut to a dinky $10,000. The Tax Complexity Lobby depends on taxes being complex and frustrating to make money. But we the people already pay the IRS to do the work once. Why pay a second time with the money we get to keep for a duplicate effort by the tax prep industry? There is no need.
    Like (65)
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    Pro’s: ensures that taxpayers who can’t afford to hire CPA’s can claim deductions that they are entitled to, but did not how to claim. Con’s: By making tax filing ”automatic”, people have less reason to get enraged by taxes. They have less reason to challenge how their tax dollars are being used, or to compare their tax burden to “elite” tax payers, who have many ways to cut their tax burden. Also, it can cut IRS costs to correct misfiled returns and collect remaining taxes due.
    Like (38)
    Follow
    Share
    No one should ever have to file a return and IRS no longer needs to exist. Just replace all taxes on income with a flat rate, simple, visible sales tax on new goods/services that includes a monthly tax credit option. FAIRtax is the answer. HR 25 in the House. 33 Sponsors/Cosponsors.
    Like (29)
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    Increase IRS budget? Nope!
    Like (23)
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    Preferably a version off and online especially for those with little to no deductions. Why do we have to pay professionals each year and each year we have to pay them more. I use TurboTax and this year I got a request from the IRS saying they missed something. I paid extra this year to have them done to avoid this. No extra nothing on my end but somehow I have to take more of my time to take care of a 1040ez because I had nothing special not even a 1 deduction.
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    They already have all this information. We get the forms from them so we can fill out other forms. We just fill in some random details.
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    Yes. The tax preparation companies made a deal to provide this because they were afraid that such a service would drive them out of business. Then they hid that option in their software. They made it almost impossible to file for free—a service that they promised to provide. (See https://www.wnycstudios.org/story/taxes-tedious) They broke their word. Let the IRS provide the service. They have the information already.
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    Forcing tax filers to go through tax preparation companies is one of the biggest scams in this country! The IRS already has the tax information for people who don’t itemize. By not having a free filing option, the government is essentially ensuring the profits of the big tax preparation companies who buy off politicians so that they do their bidding. Provide a free filing option now!
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    Absolutely! The only thing keeping this from being a no-brainer are the lobbying dollars from the companies whose business model relies on taxes being complicated. The IRS has the data to make the process far faster for most of us, and they should use it to that end!
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    This only complicates the system that is already filled with “suggestions” to simplify the process. Honestly, going out and buying TurboTax with four licenses on it and sharing that with family or friends is the best way to go. I would gladly spend $50 to get this and it takes less than a half hour with it’s simple guide. There are also free programs out there offered by tax filing services as well. People can take advantage of these programs well before the IRS comes up with a feasible program that costs more money to maintain than it would to go and buy $50 worth of TurboTax.
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    Um. Yeah. If you're going to make me pay for this, I shouldn't have to pay others to set up information the government already has.
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    This would be awesome! Better yet, automatically adjust the returns so everyone pays what they owe with out ever owing more at tax time.
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    People need to be Responsible for their own taxes Preparation. The IRS, in partnership with the major tax preparation companies, already has a Free File program that allows taxpayers making $62,000 or less a year to file their taxes for free. This bill would require the IRS to do more work and may make it necessary to increase the agency’s budget. SneakyPete..... 👎🏻👎🏻👎🏻 IRS 👎🏻👎🏻👎🏻. 6.17.19.....
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    they know how much we are getting paid why not just tell us what to pay?
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    This would literally make lives easier and better when dealing with the government. Forget your lobby. Think of your constituents.
    Like (8)
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    No. I don’t trust the government to do this honestly- trump has no integrity- he’s a fraud and a scammer and a con artist- and trump’s corrupt criminal regime has no decency and cannot be trusted. Citizens would be ripped off by this evil regime.
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    Yes. The IRS already knows the answers to all the questions on my return. Seems like it will work real nice for everyone except the tax cheat currently occupying the Oval Office.
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    Yes. This is an obvious step toward simplifying the tax filing process for millions of Americans. The IRS already knows how much we make (for the most part). Showing our duplicative work is a waste of time and ripe for audits, which poorer Americans are more likely to suffer than richer Americans.
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