The dreaded day is upon us: April 15. Tax Day. Whether you did your taxes early or waited until the last minute, and whether you did them yourself or had help, you’ve probably thought at some point, “There has to be an easier way to do this.” I’m pleased to say there is. If you weren’t aware there is an easier system, you can blame TurboTax and H&R Block.
What I’m talking about is called return-free filing. Return-free filing is a tax system in which the government does its own accounting to determine how much you owe, according to the Tax Policy Center. You may be asking, “Don’t they need my information? What about all those forms I need to send them?” However, most people only collect income through wages and interest from money in the bank, and employers and financial institutions already send that information to the government, as explained by the Brookings Institute.
So, under a hypothetical return-free filing system, the government would send you your tax bill when you’d normally be filing your own taxes. You would review it and add any corrections or additional deductions, and then you would send it back. However, people could opt-out of return-free filing if they wanted to. This system wouldn’t be useful to everyone. Some people have more complex income sources and take more complex deductions. Most likely, those people would still have to do their taxes the old-fashioned way. Still, the Brookings Institute estimates up to 40 percent of taxpayers could benefit from return-free filing.
This idea isn't new, so why hasn't it been implemented? Former President Ronald Reagan proposed a version of return-free filing in 1985, and former President Barack Obama spoke approvingly of return-free filing while campaigning for president in 2007. Furthermore, 36 countries already use some form of return-free filing, so this isn’t just some obscure proposal dreamed up by a think-tank policy maker. Why then, hasn’t anyone made this change?
The short answer is “big money” and lobbying, specifically by tax preparation companies like Intuit (the maker of TurboTax) and H&R Block. In 2013, ProPublica conducted an investigation into Intuit’s lobbying of Congress. According to ProPublica, “Intuit has spent about $11.5 million on federal lobbying in the past five years — more than Apple or Amazon.” Likely because of this lobbying, multiple bills to introduce return-free filing died in Congress.
As I write this, it looks like tax preparation companies are on the verge of another big win. For years, there has been an agreement between Congress and industry groups that the Internal Revenue Service (IRS) would not offer its own return-free electronic filing service, instead deferring to an industry consortium called the Free File Alliance. However, the Free File Alliance has been criticized as an underpromoted and confusing program that mainly seeks to upsell users on premium and value-added services provided by tax preparation companies. Despite these concerns, it looks like the status quo is going to be codified into law. A bill before Congress would formally prohibit the IRS from introducing its own electronic or return-free filing program, according to the Chicago Sun-Times. This bill, ironically called the Taxpayer First Act, passed unanimously in the House of Representatives, and it now goes to the Senate.
In the face of industry lobbying and bipartisan opposition to electronic and return-free filing, now is the time for us to speak up. Write to your congressman and senator to tell them you support electronic and return-free filing and you oppose the Taxpayer First Act as long as it bans the IRS from creating its own electronic filing system. It may be a long shot with the forces of the tax preparation industry against us, but that’s what democracy is all about. We all need to speak up and support an idea that would end the dreaded feeling of Tax Day and make our lives so much easier.
Jason Zappulla is a UF history junior. His column appears on Mondays.