Over 60 Million Americans Have Taxes So Simple the IRS Could Do Them Automatically
6th April 2023
For many Americans, doing your taxes isn’t all that complicated. It’s just data entry.
The actual work of doing your taxes mostly involves rifling through various Internal Revenue Service forms you get in the mail. There are W-2s listing your wages, 1099s showing miscellaneous income like from one-off gigs, 1098s showing mortgage interest or tuition payments, etc.
But here’s the thing about those forms: The IRS has them, too. For many people, the IRS has all the information it needs to calculate their taxes, send taxpayers a filled-out return, and have them sign it and send it right back to the IRS if everything looks in order.
It’s even worse than that. Once you send in your tax return, the IRS plugs it into their machines and recalculates your return, comparing it to the information it has already received, to make sure you are being honest.
But of course tax return preparation is a huge industry, both for the Big Boy tax preparation services like Intuit and H&RBlock and TurboTax, and for individual accounting practices. And those guys have a lot of money to spread around to politicians to make sure that their rice bowl isn’t disturbed. You can tell where this is headed.
I have yet to file a tax return that the IRS didn’t send me a nastygram about how I Done Them Wrong and informing me of what they did to fix it. In fact, my wife and I had taken to filling out the return and signing it, leaving the tax calculation blank, and letting the IRS figure the tax and send us a bill. (They will charge you interest, which is trivial these days, but no penalty if you pay up before the grace period ends.) My life would be substantially easier if I had a rough IRS-generated draft to start with. But NOOOOOOOOOO…