In other countries, admittedly those with less complex tax codes, it’s a reality. And it could be here, as well. But who would trust the IRS? Not many of us would want to get a tax bill from the Feds every year, because as various polls indicate, we don’t trust the government, especially when it comes to our money.
But is that the reason the IRS doesn’t do the work for us? The more likely reason, pointed out in a recent article in The Economist, is what is loosely known as the tax compliance industry, which is estimated to be $150 billion. Lobbying efforts to keep it in place and lucrative have been going on for a long time.
Companies like H&R Block and Intuit (makers of Turbo Tax) as well as countless accountants, would be out of work if the IRS prepared our taxes for us for free. A White House panel rounded out the number of hours Americans spend doing their taxes at 7.6 billion hours, which is about 24 hours per person. And for many, many Americans filing a 1040 EZ, it is unwarranted.
According to the article, here is how it would work:
“The IRS would use the information it already has to fill in a standard return (a rather effortless process for the government), which would then be sent to you to accept, edit or reject and replace with a new return if you think you can do better.”
Now that doesn’t seem so bad, does it?