Why free tax prep is so hard to find

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Publish Date:
March 22, 2022
Source:
Newsy
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Summary

Another potential solution to the problem is return-free filing. The government would calculate your taxes for you using all of your W-2 and tax forms, and then you could either accept the result or provide proof that you should pay less or get back more.

California piloted its version of this approach to favorable reviews from tax filers. Joe Bankman, a Stanford University law professor, helped create the system.

“They know your wages because your employer already reported it to them,” Bankman said. “So in California, we took that information, and we sent a pilot group a completed return, and we also made it available online. And we said, based on what we know and what you reported last year about your household status, how many kids you have, and so on, here’s what we think your return will look like. If this is right, hit correct, submit.”

But it didn’t last long. California Republicans alleged that the software could cost taxpayers money if it didn’t always maximize deductions. And, of course, we should mention that Intuit – the maker of TurboTax, which is based in California – spent over $1 million lobbying lawmakers as Ready Return was getting off the ground.

So Bankman fought back, pouring in $35,000 of his own money to counter-lobby state legislators to promote the return-free system. He’s also advocated for it to members of Congress.

“When I went to California to try to fight into it, I thought, ‘Well, there’s only 120 legislators. I’ll talk to them all one on one,'” Bankman said. “I found that in order to do it, I had to hire a lobbyist because I just couldn’t handle the details or get the meetings. In Congress, when I went there, now there’s 500 plus, and what I found everywhere I went is that Intuit had already preceded me. They’d already met every representative I was going to meet.”

“You can imagine if you’re not too literate and you’re not too numerate, maybe English isn’t your first language. It is an enormous burden,” Bankman said.

 

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