ProPublica: Tax filing could be so much easier if not for TurboTax's lobbying

http://www.propublica.org/article/how-the-maker-of-turbotax-fought-free-simple-tax-filing

I think Ragu and I have found common ground here.

Intuit, the maker of TurboTax, has spent $11.5M lobbying in the past five years to stop the IRS from creating a system where tax forms are pre-filled with a taxpayer's reported income from employers and banks. People would make any necessary changes and send the forms in themselves. Similar systems are already in place Denmark, Sweden and Spain; both Reagan and Obama have endorsed a similar system in the U.S.

The big problem is the billions of dollars that wouldn't be spent on tax preparation each year. So Intuit has been fighting this -- to keep the government at bay on behalf of all citizens, of course.

 

I find it hard to believe - with a nest full of tax lawyers - Turbo Tax is the only entity fighting this.
It's like the flat tax idea. It's great idea, but it also simplifies the tax system and prolly puts a lot of folks out of work.

 

It also puts Uncle Sam in charge of calculating how much you owe Uncle Sam. Which I'm not inclined to believe would simplify anyone's tax experience. And wouldn't work for any return that itemized deductions.

 

As the story states, it would be voluntary. You don't like the IRS calculation or want to itemize, then you could fire up TurboTax, head to HR Block or go to a CPA.

 

Understood. And I don't side with Turbo Tax.

But my experience with the IRS still leads me to think you're letting yourself in for longer, harder arguments after the fact if you have it prepare your return. (On top of which is the Grover Norquist conspiracy worry that the IRS would simply rob everyone blind.)

I wonder, too, what would happen in cases where the IRS prepared a return for a waitress or a bartender, and caught them holding back undeclared cash income.

 

Actually, the opponents of this have some valid points, one of which is this:

The next year, Norquist and others wrote in a letter to President Bush that getting an official-looking "bill" from the IRS could be "extremely intimidating, particularly for seniors, low-income and non-English speaking citizens."

I know this is an issue, and not just for "seniors, low-income and non-English speaking citizens," or even the merely naive among us.

The national trade magazine I edit just ran a story about businesses receiving what appears to be an invoice for some sort of website service. It includes all sorts of information on that business' site -- name servers, mail servers, domain information, etc. -- as well as a statement date and an amount, usually $65 or so, for an "annual fee." It turns out, a huge number of businesses see it, note that it looks like a bill and has all the correct information on it, and pay it, assuming it's some sort of fee from some tech company or other to keep their website up and running.

Actually, it's a scam. All that information on the "invoice" is easily accessible by doing a "Who Is" on a company's website. And buried in the middle of the "invoice" is a statement that reads: “This is a solicitation for the order of goods or services, or both, and not a bill, invoice, or statement of account due. You are under no obligation to make any payments on account of this offer unless you accept this offer.”

Because it includes that statement, it is perfectly legal. But because the statement is located in the middle of the page next to other similar type, people see it, think it's a bill and pay it.

I can see the same thing happening with the tax thing. People get something official from the government telling them how much they owe in taxes, figure that must be how much they owe, and pay it.