One of the right’s favorite talking points is how they’d like the tax code to be so simple that a citizen could file their taxes on a postcard.
Here’s what the right doesn’t talk about: There is already a law on that books that would make tax filing simpler and save taxpayers tens of millions of dollars – but the tax preparation industry has succeeded in keeping the law from being implemented as intended. That’s not a surprise that companies like Intuit, the maker of TurboTax, would go to war against this law: Simplified tax preparation is a mortal threat to their business.
As an e-mail by Warren via Democracy for America states, a bill was signed into law in 1998 that required Congress to implement a simple, “return-free” filing system within 10 years. Eighteen years later, we still haven’t seen it.
“Instead, the IRS surrendered to pressure from the tax preparation industry – giant, powerful companies that make a lot of money off of complicated tax forms,” Warren’s e-mail says. “Year after year, the IRS signs contracts with these private companies, agreeing not to create a free, online tax return preparation and filing service – even though it could save taxpayers time and money. And to make sure the IRS keeps tax filing difficult, the tax preparation industry spends millions of dollars lobbying Congress to block return-free filing systems.”
In fact, Intuit spent $5.4 million on lobbying Congress in 2013 and 2014, according to OpenSecrets.org. Competitor H&R Block, which has both tax preparation offices and software, spent $2.4 million on lobbying during that same period.
As the report released by Warren notes, “The tax-filing burden is an essential part of the tax preparation industry’s business model, and the industry sees return-free filing as a fundamental threat to its operations.”
The industry gets help from some of the very people in the conservative movement who make a campaign issue of the complexity of the tax code. “But the same anti-tax groups that champion a simpler tax system have worked closely with the tax preparation industry to oppose free filing,” the report said.
The Tax Filing Simplification Act “would direct the Internal Revenue Service (IRS) to develop a free, online tax preparation and filing service that taxpayers can use to prepare and file their taxes directly with the federal government, if they choose to do so, and would prohibit the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services,” according to a news release from Warren’s office. “The Act would give all taxpayers the right to download third-party-reported tax information that the IRS already has, and would provide those with simple tax situations with a return-free option.”
Sen. Bernie Sanders (I-Vt.), the Democratic presidential candidate, is a cosponsor of the bill, as is Sens. Sheldon Whitehouse (D-R.I.), Tom Udall (D-N.M.), Jeanne Shaheen (D-N.H.), Al Franken (D-Minn.), Tammy Baldwin (D-Wis.), and Edward J. Markey (D-Mass.).
Calling for congressional passage of the Tax Filing Simplification Act is one way you can tell Congress to make Tax Day less painful – and strike a blow against the special interests that profit from our collective tax season pain.