Obama Tax Commission Report: Baby Step Toward IRS Tax Preparation (IRS Does It All, Wants It All)

ATR ^ | 9/1/2010 | Ryan Ellis

[Andrea19]

Last week, President Obama's tax reform commission came out with their long-overdue report--buried on a Friday during the August recess.

One area of the report worth exploring is the section on "return free" tax filing--a polite way of saying that the IRS would do your tax return for you, calculate your balance due or refund, and leave it up to you to take on City Hall. This is a bad idea because it puts the IRS in a conflict of interest. The IRS has an interest in maximizing the legal amount of tax owed. Taxpayers have an interest in minimizing the legal amount of tax owed. This healthy friction, what we've called "benign adversarialism," is what creates our system of voluntary tax compliance. To upset this balance would also reverse the default assertion (that made by the taxpayer) as the basis for compliance review. Rather, the new baseline would be the IRS version of the tax return, and it would be up to the taxpayer (with his much inferior resources) to challenge the behemoth.

The Obama tax commission didn't see it that way.

In their "Option Group D" (starting on page 41), they examine the California "return free" system. In that state, the Department of Revenue sends pre-filled returns to simple taxpayers. It's up to the taxpayer to dispute the state's findings. The question is raised as to whether this would be appropriate for the IRS to do...

Read more: http://www.atr.org/obama-tax-commission-reportbr-baby-step-a5363#ixzz0yOMCSkRN

[Andrea19]

Could the best part of this tax preparation actually be free?

Help promote Conservative activism here & here & here & here

[Daveinyork]

It would work for some people who are not self employed. It would not work for the self employed. Also, there are other issues that would not show up on third party filings like w-2’s and 1099’s.

[E. Pluribus Unum]

The IRS should just receive your paycheck straight from your employer, take out what they need, and forward anything left over to you.

[llevrok]

How about a simple flat tax and make it really simple with many less at the IRS needed to manage this.

[NEMDF]

Sounds like one more way to take control of our lives and tell us that we don’t need to worry about it. Also another industry becomes obsolete, taken over by the federal government.

[Son of Redleg]

In the UK it is the norm that people do not file tax returns. Unless you are a company director, self employed, have rental income, etc, you aren't required to file. Most income and interest is taxed at source and there are few deductible expenses worth declaring. For example mortgage interest is not deductible in the UK.

For me the worst thing about filing a return is that you get to see just how little of what you earn is left after the government gets it's share. As a business owner, I also know how much additional tax is paid on employment for ‘National Insurance’ (our so-called free ‘health care’).

It is pretty easy and straightforward to file if you need to do it, it takes me less than an hour each year. That's why professional tax return preparation isn't a big business in the UK.

[theBuckwheat]

Payment of taxes has two essential functions: 1) it pays for government and 2) it makes the cost of that government tangible to each taxpayer. Thus, when government moves to hide the payment of taxes, it is moving to hide its real cost to those who are paying the bill.

[TruthConquers]

That is right.

And they have been doing so since WWII; that is when they started automatic deductions, straight from YOUR paycheck into the government coffers.