Monday, January 7th, 2019 @ 8:36PM

Simplifying the tax-preparation burden has historically always been a bi-partisan issue,  but legislation to that effect rarely ever meaningfully gets passed through Congress.

There are bad actors that fester in the halls of Congress who have continually obstructed the passage of “return-free filing” legislation which would pre-populate tax forms with all the information that is already provided to the IRS by employers so that it is ready to sign and submit.

Economists have estimated that such a system would apply to as much as 40% of all the tax returns. Filing your tax return could be effortless but tax preparation services H&R Block, and Intuit (TurboTax) have collectively spent millions of dollars annually to oppose such legislation.

This doesn’t even include the legions of accountants, lawyers and tax-preparation firms that have a massive vested interest in keeping the tax code complicated. After all, the more confusing your taxes are, the more they get to charge. It doesn’t help that the IRS maintains a labyrinth of tax traps that force otherwise independent Americans into the hands of these profiteers through reasonable fear of being solely liable for making a mistake.

How big of a deal is this?

Data from the Office of Information and Regulatory Affairs reveals that it takes 8.9 billion hours of labor, equivalent to 4.3 million Americans working full time on tax-return paperwork for an entire year, to comply with IRS tax filing requirements. Quantify this into dollars wasted and you’ll find that an inefficient IRS and its tax code costs America $409 billion in total this year.

But that’s just the government’s take on the situation; some organizations say the waste is larger. The Mercatus Center at George Mason University claims the hidden costs of complying with the tax code actually put the high estimate at approximately $1 trillion wasted per year.

A huge chunk of this economic waste is revenue for the tax industry which profits off of the fear and confusion of American taxpayers.

Is this a radical, crazy idea?

NPR and Priceonomics put the situation in an interesting light. What if paying your monthly credit card bill was like filing your taxes. It’s not a ludicrous comparison. They explain it like this:

“Each month, Visa would send you a blank form. The form would instruct you to gather all your receipts, write down every purchase you had made, and calculate the total amount you owed Visa. After you sent in your bill, Visa would check its records. If you’d forgotten a receipt and underpaid, Visa would fine you. If you’d made a big enough mistake, you’d go to jail.”

Not only is return-free filing obviously desirable, but it has precedent too. According to the tax policy center over 36 countries already offer return-free filing. In Estonia, 95% of taxpayers file using return-free filing, while they boast an average tax-return completion time of just 3 minutes.

But Americans won’t get to file their tax returns in 3 minutes, all thanks to H&R Block, Intuit and the legions of less prominent tax lawyers, accountants, specialists, and filing organizations that all profit off of your pain and suffering.

Posted by cfegov
Categories: Fraud, Waste and Abuse