CFO Patronis should leave the IRS alone
Jimmy Patronis, Florida’s chief financial officer, wasn’t bereft of bad ideas after Gov. Ron DeSantis killed his scheme to have taxpaying Floridians pay $5 million toward Donald Trump’s legal expenses.
His latest stunt is an attack on the Internal Revenue Service over its pilot program, Direct File, that lets some taxpayers in Florida and 11 other states file their 2023 returns directly online with the government, costfree.
Along with the top financial officers of 19 other Republican-run states, Patronis signed a letter urging the Department of the Treasury and the IRS to terminate what they called “a solution in search of a problem” once this year’s experiment ends.
Most Florida taxpayers would take issue with that characterization.
Praise for the tax man
Form 1040 ranks high on everyone’s list of life’s nagging problems. For trying to make tax compliance more user-friendly, the IRS deserves praise, not blame. If Direct File falls short, it’s only in being limited to the simplest tax returns. It makes sense, though, for the IRS to launch this reform cautiously.
But to Patronis and his like-minded state colleagues, Direct File is more likely to hurt than help. Why? Because it doesn’t enable taxpayers to file their state tax returns. Thus, “Taxpayers who are unaware that they must separately file state returns will not receive anticipated state returns this spring,” and states that are owed taxes may not receive them.
So they say. The IRS Direct File site makes it unmistakably clear, however, that it is for federal taxes only and that they may additionally owe state taxes.
Moreover, simple language tells users how Direct File can transfer their information to the direct file programs of several income-tax states. To that extent, it does help them file their state tax returns.
It’s one and done
Why that should trouble Patronis is perplexing, since Florida does not levy a personal income tax. It’s one and done when Floridians file with the IRS. That’s also true of three other states whose fiscal officers signed the letter: Alaska, South Dakota and Wyoming.
A hint at what may really underlie their concern is a reference to the nation’s commercial tax preparation services which, they say, include some free programs “that are better suited to serve taxpayers” and are “widely available.”
That sounds as if it could have been inspired, if not actually written, by lobbyists for the CPA profession and the large firms, such as Intuit and H&R Block, that market tax-filing software.
A government study, somewhat dated, found in 2011 that 56% of all federal returns were completed by a paid preparer. The Government Accountability Office (GAO) found “significant” errors during random unannounced visits to some of them.
The CFO and CPAs
Since the CPA profession has a self-evident interest in the success or failure of Direct File, it seems appropriate to ask what interest it might have in Patronis himself.
According to the state campaign finance database, CPA firms and their state PACs have contributed $20,850 to Patronis’ campaigns since then-Gov. Rick Scott, who had put him on the Public Service Commission, appointed him CFO to fill a vacancy in 2017. He had no special qualifications for either appointed post, having made a business career of helping to manage his family’s seafood restaurant at Panama City Beach. He had been a dependable, early supporter of Scott.
Earlier, when Patronis ran for and was elected to the state House from Panama City, the CPA industry had invested $5,750 in his several campaigns.
The bulk of Patronis’ financial support from CPAs, $15,100, was given to his 2018 campaign, the first since his appointment, when Democrat Jeremy Ring of Parkland polled 48.3% of the vote despite being seriously outspent. Patronis had an easier race in 2022.
The CPA funds weren’t notably large in the context of Patronis’ $2.4 million campaign haul, but those who gave it can expect to be asked for much more if he runs for governor in 2024, as some expect. In any case, they shed light on what may have had much to do with inspiring that round-robin letter criticizing the IRS.
A member of the Cabinet
Created by Florida voters, the CFO is one of the three elected Cabinet members who share responsibility with the governor over several state agencies and functions, and has the sole constitutional duty of paying the state’s bills and banking its money.
By law, the CFO also oversees the state fire marshal. Of most interest to the public, his department houses the divisions that regulate insurance, banking and securities industries, though they answer to the governor and Cabinet, rather than to him only.
Patronis’ major legislation during this year’s legislative session was an omnibus bill (House Bill 989) that, among other things, gave him an agency to assist Floridians who have issues with the IRS. That part wasn’t controversial, but the session’s closest vote, 49 to 45 on an amendment in the House, will allow him to deposit state funds with credit unions for the first time. It was a significant defeat for the commercial banking lobby, which argued that credit unions have a competitive advantage in being exempt from some taxes.
All in all, we think Patronis has enough legitimate work to do without shilling for the CPA industry against what the IRS is doing to help taxpayers file accurate returns and save some money. Let’s hope he has finally exhausted his stash of bad ideas.