Send postcards to friends, family, not IRS

The unified tax reform framework rolled out by President Donald Trump and the GOP is chock-full of politically charged ideas. But one populist pitch could be to make a tax return simple enough to file via a postcard.

Yes, a postcard. You know the things people once put in the mail before we could brag about our vacations on Facebook and Snapchat?

One bullet point in the tax reform overview calls for the “simplicity of ‘postcard’ tax filing for the vast majority of Americans.”

Frankly, I don’t see us ever using real postcards for tax returns. We’re not revealing how we just spotted Mickey Mouse or the Mad Hatter at Walt Disney World here. We’re supplying sensitive information about our finances — including bank account numbers for where we want our tax returns directly deposited.

In the post-Equifax data breach world, consumers increasingly don’t want any more people to get their eyes on their personal information. So I suspect we might want an envelope, even if Washington figures out a way to put a tax return on a 3½-inch-by-5-inch piece of paper.

If a postcard idea sounds dated, kind of like rotary phones, well, it is. Publishing executive Steve Forbes wrote a book called “Flat Tax Revolution: Using a Postcard to Abolish the IRS” back in 2005. And there were similar proposals long before that book.

Leon LaBrecque, CEO of LJPR Financial Advisers in Troy, Mich., said he has no doubt that some tax returns could be further simplified and whittled down to a small piece of paper.

Most Americans have W-2 wages, which are already available electronically. They might have some interest income from a bank account, which again would be available electronically, he said.

Many retirees don’t necessarily have complicated returns if they’re living mainly on a pension or IRA income — as outlined on a 1099-R, also available electronically, he said. Data for Social Security income can be confirmed electronically, too, LaBrecque said.

“More interesting would be if you could file by an app,” LaBrecque said.

An app is certainly trendier than a postcard and might be the next logical step — if your data could be protected from hackers.

Joel Slemrod, professor of economics at the University of Michigan, said the idea for putting taxes on postcard might have been more appealing many years ago when Forbes first proposed it.

But most people aren’t looking at paper tax forms any more, as they’re turning to TurboTax or tax professionals to electronically prepare and file returns, he said.

More important, of course, is that what’s been proposed so far doesn’t go deep into details about how Washington could simplify the tax code.

No doubt, tax code simplification is necessary. Honest taxpayers can be tripped up by rules that are difficult to understand, according to Nina E. Olson, who leads the National Taxpayer Advocate Service, an independent organization inside the IRS that helps taxpayers resolve problems.

Olson noted that according to her office’s analysis of 2015 IRS data, individuals and businesses spend about six billion hours a year complying with the filing requirements of the tax code.