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Would you kiss that tax return hassle goodbye?

July 15, 2012

For the past few years I’ve done my own taxes and… it is a pain.  Might this be an easy opportunity for the federal government to innovate, become more useful and efficient, bring in new fees and offer us more choices?

Each year our government receives tons of data from employers, banks, brokerage firms and state & local governments.  After you file your taxes, IRS computers compare your reported income and deductions with data from others.

What if, by March 15th, the IRS emailed you a simple question “Based on your last years return and other data provided to us, would you want us to prepare your tax return for you?”  If you reply yes, the IRS would send your completed return (showing their service fee) on their simplest form.  After your review and any final changes you would e-sign it and the IRS would issue your refund.

How you might benefit:

  • you’d have another accurate, simple, low cost way to file and pay your taxes.
  • if you accept their numbers, the IRS would agree not to audit you except for fraud.  Wouldn’t a no-audit promise be worth quite a bit?
  • you’d get electronic filing and a super fast refund.  No need for a refund loan.
  • you’d have more choices.  If you like what they send you, use it and be done.  If you don’t, call your tax preparer or do it yourself.

How the government might benefit:

  • they’d have a huge reduction in errors.  Most of the letters the IRS sends taxpayers are the result of a discrepancy between your tax return and the data your employer or bank provides.  If half the taxpayers converted to IRS generated returns, they would need far fewer people.
  • they’d  create a new source of voluntary revenue.

The losers?  Accountants and other sellers of tax prep services and software.

Might you take advantage of this?

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From → Government

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