Why Isn’t It Easier To File Your Tax Return For Free? Thank TurboTax, H&R Block

Details

Publish Date:
March 20, 2017
Author(s):
  • Morran, Chris
Source:
Consumerist
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Summary

For most people, the IRS now has all the information it needs to estimate how much you owe in taxes, or how much of a refund you are due. So why is the burden on you to tell the federal government this same information? It may have something to do with the millions of dollars that H&R Block, Intuit (maker of TurboTax), and others have spent lobbying to maintain their exclusive arrangement with the IRS.

The IRS Restructuring and Reform Act of 1998 directed the Secretary of the Treasury to come up with a “return-free” tax filing system by 2008. Under such a system, the IRS would take the W-2s, 1099s, and other tax forms it receives to automatically calculate and prepare a rough draft tax return for taxpayers who want it — and for free.

Tax law specialist Joseph Bankman of Stanford Law School tells ProPublica that he doesn’t see it that way. Having the government pre-fill the tax return could actually help taxpayers, by compelling the IRS to “show its hand.”

“Now you know what the government knows,” Bankman explains. “If there’s a mistake that goes in your favor, maybe you don’t call attention to it.”

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