The IRS already has all your income data – so why do Americans still have to file?

[DGUtley]

The IRS already has all your income tax data – so why do Americans still have to file their taxes?


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Doing taxes in the U.S. is notoriously complicated and costly. And it gets even worse when there are delays and backlogs, making it especially hard to reach the Internal Revenue Service for assistance. But to me this raises an important question: Why should taxpayers have to navigate the tedious, costly tax filing system at all?

The case for a ‘simple return’


In 1985, President Ronald Reagan promised a “return-free” tax system in which half of all Americans would never fill out a tax return again. Under the framework, taxpayers with simple returns would automatically receive a refund or a letter detailing any tax owed. Taxpayers with more complicated returns would use the system in place today.

In 2006, President Barack Obama’s chief economist, Austan Goolsbee, suggested a “simple return,” in which taxpayers would receive already completed tax forms for their review or correction. Goolsbee estimated his system would save taxpayers more than US$2 billion a year in tax preparation fees.

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https://theconversation.com/the-irs-...r-taxes-175777

[Collateral Damage]

There is an extensive amount of administrative burden on employers to provide information to the government in regards to taxable income.

W-2s, 1099s (NEC & MISC, INT id applicable) and heaven forfend if you make an error.

There are those (of which I am NOT one) who feel that the government should control what wages are paid for what position and disperse it on the employer's behalf.
That idea nauseates me.

[carolina73]

One thing about government workers is they are never going to eliminate their own jobs. Biden just added 87,000 IRS agents to prove it.

[stjames1_53]

Under the US UCC, it is considered a contract when you sign on the line.
As a contract, all parties agree to all portions of your form. By signing the contract, you also agree to any and all changes the other party changes, in whole or in part.
Doubt me? Any of you could send in an accurate tax filing without signing it, and they will send it back telling you to sign it.
By signing it, you also voluntarily wave your 5th A Right.

[carolina73]

There is an extensive amount of administrative burden on employers to provide information to the government in regards to taxable income.

W-2s, 1099s (NEC & MISC, INT id applicable) and heaven forfend if you make an error.

There are those (of which I am NOT one) who feel that the government should control what wages are paid for what position and disperse it on the employer's behalf.
That idea nauseates me.

It is hard to imagine what how these people think, who consider government to be either helpful or efficient. If you have a company car then you are pretty much obligated to claim 11% of the miles as your own and income even if you have 3 cars in the driveway that you actually enjoy driving. A waitress has to claim her tips, which are a thanks/gift at a certain rate or risk audit, causing me to never tip on a card and leave cash.

[zelmo1234]

You could do a graduated tax code where people that just work and get a W-2 would never have to file taxes again, unless they won a big lottery, or received an inheritance.

But that would reduce the IRS by 85% and there is that 2 billion in tax preparations each year.

[OLD GUY IN FLORIDA]

It is hard to imagine what how these people think, who consider government to be either helpful or efficient. If you have a company car then you are pretty much obligated to claim 11% of the miles as your own and income even if you have 3 cars in the driveway that you actually enjoy driving. A waitress has to claim her tips, which are a thanks/gift at a certain rate or risk audit, causing me to never tip on a card and leave cash.

Yet another reason to tip in cash. I have been doing it to insure the server gets the tip and I always put it in their hand so some passing diner can't scoop it up, as I have seen done.

[OLD GUY IN FLORIDA]

The IRS only knows what income has been reported for you. If you work a second job and are paid cash they have no way of knowing just what you made or how much tax is due. By requiring you to file a return you commit a crime if you don't report it all. Seems to me that is a 5th Amendment violation.

[Mini Me]

One thing about government workers is they are never going to eliminate their own jobs. Biden just added 87,000 IRS agents to prove it.

That's to catch all the TAX CHEATS who also have off-shore bank havens to stash their wealth.

[Newpublius]

The IRS already has all your income tax data – so why do Americans still have to file their taxes?

Well they actually don't have everything. With respect to a Schedule C for instance, they are not privy to what your business expenses are. They might know what your credit card sales are with a 1099K. Also charitable contributions.

You can also rollover your 401k and when you do that will trigger a 1099R but when you roll it over there's no form to offset that 1099R....

I have a quasi-complicated return, multiple states, 30-40 forms, I actually fret that I might actually forget something small and trigger an unnecessary audit.

I do agree though that there are individuals who probably should simply be able to select filing based off what the government has.