![]() ![]() It's possible this is something the IRS could just sort of start to do on its own. I mean, the secretary of the Treasury, Janet Yellen, said recently that she supports changing the system and making it easier, but she didn't specify how. SIMON: If the study that has been mandated ends up supporting a free file system, will that fly in Congress?ĮLLIOTT: You know, it's an interesting question whether congressional action would actually be needed. So if you could reduce that number, I mean, that could make a big difference in people's lives. There's been estimates that Americans spend over 2 billion hours per year preparing their taxes. But this is not just a matter of the billions of dollars that people pay to private companies to prepare their taxes. SIMON: What about the argument that I think those private tax preparation companies often use that goes something like, yes, if you're satisfied with the standard government deduction, you can accept that and be happy, but we're experts, and we know how to get you perfectly legal deductions that you haven't thought about yet and that the government isn't going to help you find out about?ĮLLIOTT: I think that there is some validity to that when you're talking about, for example, somebody that owns their own business where their tax liability's a potentially complicated thing - what is a legitimate expense, etc. And the industry has long opposed any effort to make it easier for people because, of course, that would cut out them as the intermediary. They make billions of dollars every year. There's also the kind of storefront tax prep places that are common in poorer neighborhoods around the country. And in fact, the reason historically why we don't have a system like this is that there is this very powerful and wealthy industry - companies like Intuit, which makes TurboTax, H&R Block. SIMON: The private tax preparation companies that offer this software for a price, I'm going to guess, cannot be enthusiastic about this.ĮLLIOTT: That's right. But for tens and tens of millions of people, by some estimates 40- or 50% of the country, your taxes are actually relatively simple. Like, if you have your own business, things get much more complicated. This wouldn't work for people who have complicated taxes. ![]() So the idea is that the United States would be able to, at least for many people, pre-fill your tax return. SIMON: What would be the problems for the IRS to try and provide what amounts to a tax filing service that's available to all taxpayers?ĮLLIOTT: Well, obviously, it's a big administrative heave, but the kind of core paradox of how we do taxes in this country is when you fill out your tax return, you're actually, for the most part, putting in numbers that the IRS already has. And this is the first time that there's really been significant movement in this direction since, really, the George W. The United States, unlike many other developed countries, does not offer a sort of free public option for preparing and filing your taxes. And the IRS has to study options for improving the tax filing system. SIMON: What does the new law say about what the IRS is required to do now?ĮLLIOTT: The new law says that they're giving the IRS $15 million to conduct a study that has to be done and returned to Congress in the next nine months. Elliott, thanks very much for being back with us. Justin Elliott is a reporter at ProPublica. But the Inflation Reduction Act, signed into law this week by President Biden, includes a provision that the IRS study ways to provide a free tax filing system. And this software can cost over a hundred dollars to file state and federal returns. Millions of Americans rely on tax preparation software to help them file their returns.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |