Fauxahontas Proposes an IRS Takeover of Tax Preparation
The yearly ritual of submitting tax returns to the Internal Revenue Service (IRS) may not be something most of us look forward to doing, but do we really want the federal government to do it for us?
Sen. Elizabeth Warren (D-MA) has proposed legislation that would require the IRS to offer you the convenience of doing your taxes for you. The actual bill would require the IRS to create programs that help taxpayers process and file their federal taxes for free. Sen. Warren says taxpayers spend, on average, 13 hours and about $200 for tax preparation services to file their tax returns. Of course, this is unnecessary (if not misleading), as there are plenty of free services available to most Americans.
Having the IRS take over the process of filing our tax returns is not an idea that will make America great again. Our tax system is based on the concept of voluntary compliance, and hollowing this out by replacing it with a government-run tax preparation system moves the IRS from a tax administration, collection, and enforcement agency on to giving “advice” to the people it’s taking money from -- a clear conflict of interest.
How long before such "advice" becomes mandatory?
Can American taxpayers trust the same government agency that wants as much of their money as possible to also decide which benefits and deductions they will receive? Even if such a system were convenient and free, would we really want it?
Sen. Warren's office claims that the IRS's Free File program is available to 70 percent of taxpayers, yet only three percent of those eligible actually use the program. Leave it to the government to figure out a way to offer something for free that hardly anyone thinks is worth using. Perhaps that is because the private tax software companies, who offer free electronic filing service to lower-income taxpayers, have figured out how to offer low cost and free services that are more user friendly for taxpayers.
Voluntary tax compliance is an important principle. Its intellectual roots trace back to the founding of our Republic. A government-administered system of tax preparation, which would target low income and lower middle income Americans, should not be added to any comprehensive tax reform that might pass Congress. Such a system would clearly undermine any notion of delivering fairness in implementing our federal income tax.
Our current system gives taxpayers many choices as consumers, and allows for the implementation of federal income taxes in a voluntary manner. Legislation such as that proposed by Sen. Warren would eliminate consumer choices in tax preparation.
Consumers expect a lot of things from tax preparation software and websites, including accuracy. They want to know that the program they use advises them of all available deductions and tax breaks and that they get those deductions and tax credits. Taxpayers also expect the programs to be very user friendly and secure in handling their personal financial information.
Should consumers trust the same IRS, that discriminated against some political groups because of the views they espoused, to also be fair and judicious in the handling of their personal financial information?
Consumers also expect quality help and customer service from the provider of their electronic tax filing products and services. Good luck getting that from the IRS.
The same federal government that will appear to be “helping” you by doing your tax returns for you is the same federal government that will soon take over the process entirely doing your taxes in a way that benefits the government. When it's too late, you will realize this is help from the government you will regret accepting. The “free” government tax processing service will lack the convenience, security, features, and accuracy you've come to enjoy from the private services currently available.
Congress should reject the Warren bill, co-sponsored by Bernie Sander (D-VT) and six other Democratic senators, because there are better alternatives currently available. Market-based solutions are always better than giving the government even more power and competing with private tax software and service providers that help Americans file their taxes easily, securely, and without violating a conflict of interest. Private tax return services are vital parts of the marketplace and they have been innovators as opposed to the stale federal bureaucracy that will be motivated to collect more in taxes, not protect the taxpayers from being over taxed.
Dean Chambers is a former pollster. His articles have been featured on the Drudge Report and The Rush Limbaugh Program.