Let’s make it easy
IRS should send annual bills and let the taxpayers decide.
Let’s suppose for a moment that American Express offered you a new kind of credit card.
Instead of sending you a monthly statement, the new card requires you to save all your receipts and tell American Express how much you owe. It becomes your responsibility to do all the paperwork necessary to tally up your bill. If you get it wrong, you get fined. Or you could go to prison.
Seems like a lousy deal, doesn’t it? But that’s the way we do business with the Internal Revenue Service.
Now, imagine paying the IRS the way you pay a credit card bill. Based upon the paperwork it already has on file, the government sends you a statement. If you agree with the bill, you pay it. If you don’t, you tear it up and file a tax return.
That’s the idea behind return-free filing, a concept that’s been kicked around for decades and endorsed by both Presidents Ronald Reagan and Barack Obama. But the tax preparation industry, which has a vested interest in keeping income taxes as complicated as possible, has spent a fortune fighting this proposal. If the same Congress that managed to pass the most dramatic tax reform plan in decades is serious about simplifying the process of paying taxes, it needs to make this common sense plan a reality.
The idea has already been tested, and it works. California launched a pilot program called ReadyReturn in 2005, giving the option to about 50,000 taxpayers who had previously filed as single taxpayers with no dependents, no itemized deductions and nothing but wage income. About 21 percent of them opted in, and most of those taxpayers concluded it saved them both time and money. ReadyReturn was later incorporated into CalFile, the state’s online tax filing site.
But special interests have dumped millions into stopping ReadyReturn from going nationwide. Intuit, which makes the TurboTax software, has staunchly opposed the idea, and it’s spent just under $24 million on federal lobbying in the last decade. Opponents have played on suspicion of the IRS and the federal government in general, conveniently ignoring the fact that return-free filing would be entirely voluntary.
One of our own members of Congress, U.S. Rep. Kevin Brady, RHouston, is the chairman of the House Ways and Means Committee. As a follow-up act to his leadership on passing the GOP tax reform bill, we urge him to take up the cause of return-free filing. It’s a simple idea whose time has come.