Tuesday, April 15, 2014

The lobbying effort to stop Tax Day from being easier for taxpayers

Posted By on Tue, Apr 15, 2014 at 5:10 PM

I wrote last week the fact that the IRS could easily auto-prepare personal income taxes for American taxpayers. People would get a filled-in tax form in the mail and have the option of doing their own taxes if they preferred — some folks have more complicated tax situations that includes reporting information that the IRS doesn't have. But for the majority of Americans, the IRS already has all of the information they need, and taxpayers could simply check to make sure everything was in order and sign off. 

Auto-preparation could would save Americans $2 billion in tax preparation fees per year and 225 million hours per year in time spent preparing our taxes. Vox.com has a two-minute video on this topic if you'd like to hear more. 

But tax preparers like TurboTax make big profits off of the current hassle and form an unholy lobbying alliance with anti-tax crusaders like Grover Norquist, who want who want taxes to be as annoying as possible so that people will be more likely to oppose taxes. 

A great piece in ProPublica does some digging on this scandalous lobby's efforts at an astroturf campaign against a simpler filing system, and reports that a lobbying group linked to Intuit, the maker of TurboTax, is involved in trying to encourage community leaders to write Op-eds and letters to Congress (all of them remarkably similar in content and language), claiming that "return-free filing" would hurt the poor. 

The letters and op-eds don't mention that, as ProPublica laid out last year, return-free filing might allow tens of millions of Americans to file their taxes for free and in minutes. Or that, under proposals authored by several federal lawmakers, it would be voluntary, using information the government already receives from banks and employers and that taxpayers could adjust. Or that the concept has been endorsed by Presidents Obama and Reagan and is already a reality in some parts of Europe.

Many of the community leaders were furious when ProPublica exposed the backgrounds of the Intuit-connected lobbyists who had pushed the letters. 

Here's more from Slate, where Jordan Weissman notes that "it doesn’t speak well for an argument if you have to trick a mouthpiece into making it for you." 

I also recommend ProPublica's excellent report from last year on return-free filing and the sleazy efforts of Intuit, Norquist, and company to lobby against it. 

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