Paying taxes is our civic duty. The government’s duty is to
make it as easy and inexpensive as possible for us to pay our taxes. But for
too long, Congress has failed to uphold this responsibility, favoring instead
corporations that profit from our need to file tax returns.
A bill recently introduced in Congress would fix this
problem. Sen. Jeff Merkley and Reps. Earl Blumenauer and Peter DeFazio have
co-sponsored the Tax Filing Simplification Act, which would create a simple and
free way for Americans to file their taxes. All other members of Oregon’s
congressional delegation should jump on board this common-sense reform.
Right now, it costs the average taxpayer about 13 hours and
$240 every year to file a federal tax return, according to Internal Revenue
Service figures.
People bear these costs and hassles even though, for many of
them, the IRS already has all the information on hand to figure out their tax
bill. Do you get a W-2 from your employer showing how much you got paid? So
does the IRS. Do you get a 1099 form from the bank telling you much interest
you earned? So does the IRS. The reality is that people often spend time and
money simply to tell the IRS what it already knows.
For some families, the harm is greater. The cost and
complexity of tax filing deters many Americans struggling to get by on low
wages from filing a tax return. While their low incomes may mean they aren’t
required to file a tax return, it also means they lose out on tax credits
designed to help their families make ends meet. In doing so, they miss out on
several thousand dollars that would make their lives and that of their children
a bit easier.
The problem of families not claiming tax credits, even
though they qualify for them, is worse in Oregon than just about every other
state.
The Tax Filing Simplification Act would require the IRS to
give people easy access to wage and other data needed to file a tax return that
the agency already has in its possession. Such a system of pre-filled tax
returns is not new; other countries already do it this way, making filing taxes
a zip for their people.
There’s more. This legislation would also allow taxpayers
with simple returns to choose to have the government fully prepare their tax
returns. And it would direct the IRS to create its own free, online tax
preparation and filing service. Yes, free.
Why doesn’t our country make it free and easy for people to
file their tax returns? Because a few big corporations profit from the current,
dysfunctional system.
In 2002, the Bush administration proposed creating a free
tax filing system, but a massive lobbying campaign by Intuit – owner of
TurboTax – killed the idea. Instead, the IRS agreed to allow a handful of
corporations, in theory, to provide free tax filing software to as many as 70
percent of tax filers.
In practice, few people access the free service. In 2021,
less than 3% of tax filers used the free service. Intuit, for one, made it so
that users could not find the free service, while steering low-income taxpayers
to its paid service. Earlier this year, the company paid $141 million to
settle a claim it had deceived users with promises of free tax filing — a slap
on the wrist for a corporation that hauled in billions in profits over that
period.
Ultimately, the deal between the IRS and the corporate tax
preparers collapsed after the IRS put in place measures to rein in the
corporate shenanigans. H&R Block pulled out of the deal in 2020, followed
by Intuit’s exit in 2021.
It’s long past due to put the interests of the American
people above those of a few giant corporations profiting from our civic duty to
pay taxes. The Tax Filing Simplification Act would save people money and
hassles, while enabling many low-paid families to claim tax credits that
improve their well-being.
It’s great that some members of Oregon’s congressional
delegation are already fighting for this common-sense reform. The rest of the
delegation should get on board.
English 
Spanish