Why do I need an intermediary to e-File?

How the Maker of TurboTax Fought Free, Simple Tax Filing

Let me sere if I understand you. It is OK for a firm or industry to get a windfall but not for "the US govt." I would be very happy to let the the US govt or even a company like Intuit get a wind fall of, say $200, to get all my tax forms and use their supposedly good software to submit my taxes, based upon a standard deduction. If I dispute their calculation I should always be entitled to drudge through all the paperwork to provide the TRUE amount of tax liability.

In my dealings with the working stiff Government employees, I have always found them trying top do a good job. Are the incompetent sometimes? You bet. I know that it may be hard to believe, but once in a while I have done something incompetent myself.

Oh! There is a better way! Have our Public servants simplify the tax code. Unfortunately, I do not expect to live that long. Instead, just to keep a modest windfall from the US govt., make things difficult an keep people working in a tax industry.

You can see how ridiculous the article referenced above is when you read this sample:

"When you make an appointment for a car to get serviced, the service history is all there."

That is clearly not the case when I have previously visited a car service company, and left them for another company because I did not get good value for my fee paid.

There is a niche of taxpayers who have nothing but wage income (1040-EZ filers) who would benefit. States such as CA only provide ReadyFile to this subset of taxpayers.

If we have the option of switching to another agency if we aren't satisfied with the value provided by the Internal Revenue Service, please provide details.

Yes, as the article says, it'd be about 40% of taxpayers.

Lots of other other countries provide automatic income tax filing for their residents. It seems to work out fine, and I don't think it's because their tax codes are less complex than ours.

R's, John

Although that estimate is from a 2003 report. And if you follow the link to the report, the ranges in its estimates are huge. For instance, the estimate from a Treasury Dept study in 2000 is "between 8 and 57 million taxpayers, or up to 44% of filers". So it could be as low as 6%.

Anyone who files Schedule D probably wouldn't be eligible. And if you have large enough medical bills or misc deductions, you wouldn't be able to auto-file.

I expect that most of the people who could use a system like this could use the 1040A or 1040-EZ.

What's the chance that any other country has tax codes as complex as ours? More specifically, do the handful of countries with return-free filing have as complex tax codes?

"Vic Dura" wrote

Some advantages to e-file are that you've already filled in the IRS computer with your data (you're just using third party software to do that). With paper filed returns someone is having to rekey every line (or almost every line), and in doing so errors can happen, and I've seen some whoppers.

With e-file you get confirmation that your return was accepted, not so with mailed in returns unless you go the extra route and send certified with return receipt.

It also saves on paper since you're not printing the paper copies and using an envelope to mail them in.

There are also other potential benefits to e-file, but my brain is fried right now.

Oh, as far as waiting on the IRS to develop user friendly tax software suitable for the average taxpayer / tax filer with the average computer, yeah. Keep waiting on that one. I'd much rather pay the consumer software providers than the extra taxes that it would take to get useable software out of the government.

Can you imagine the tech support? Let alone the "call an expert" line?

They could just contract it out to one of the consumer tax software vendors. Call it Obama-TurboTax.

Probably not, but we're not talking about automatic online filing for everyone, just the people with simple returns, and the tax rules at the low end aren't that complicated.

I'd expect that everyone who files a 1040E-Z and many (most?) of the people with a 1040A don't tell the IRS anything it doesn't already know.

That's exactly what I said in part of the post that you snipped.

Although even the 1040A includes a number of deductions and credits that many average taxpayers may have: tuition deductions, student loan interest, child care credits. Does the IRS know these amounts?

Although it's not the same as return-free tax filing, I believe both TurboTax and TaxAct offer free online completion and e-filing of these simple forms.