Free Tax Filing From the IRS Is Not the Path To Tax Simplification
AP Photo/Elaine Thompson, File
Free Tax Filing From the IRS Is Not the Path To Tax Simplification
AP Photo/Elaine Thompson, File
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No one likes paying taxes, and the fact that you, the taxpayer, often have to spend hours and money figuring out how to do so correctly adds insult to injury. But the only thing worse than that would be to have the IRS even more involved in your tax filing than it already is.

Recent legislation introduced by Sen. Elizabeth Warren (D-MA) in the Senate and Reps. Katie Porter (D-CA) and Brad Sherman (D-CA) in the House would do just that, empowering the IRS to create its own free tax filing service for taxpayers to use. But while taxpayers wouldn’t pay directly for the “service,” subjecting taxpayers to having to work even more closely with the IRS has costs of its own.

Taxpayers may dislike paying tax preparers to do their taxes for them, but at least tax preparers have every incentive to reduce your tax burden as much as they possibly can. The IRS, meanwhile, has no such goal.

In fact, in recent years the IRS has increasingly adopted the attitude that every taxpayer is a potential tax evader trying to sneak one by the agency. As a result, the IRS has taken to treating tax disputes not as taxpayers advocating for themselves in good faith, but as efforts by those taxpayers to get out of paying what they owe. Consequently, the agency has become increasingly aggressive and indifferent to legal constraints. 

To illustrate this trend, back in May of 2021, the IRS lost 9-0 in a Supreme Court case over whether it could ignore federal law requiring it to follow a defined process when enforcing a new regulation. For a federal agency to lose in a court system prone to defer to the Executive Branch on interpreting the law is noteworthy enough — to lose unanimously means that it was way out of line.

But here’s the thing: it wasn’t even a year later before it happened again. This time, the IRS tried to invalidate a taxpayer’s appeal because it was filed to Tax Court a single day late — an attempt that is particularly ironic given the IRS’s backlog of tax returns going back years. Once again, the Supreme Court sided unanimously against the IRS.

And it’s not just in court that the IRS has demonstrated its hostility to taxpayers. During all of 2021, a year where it struggled to process returns, issue refunds, and respond to taxpayer inquiries of all kinds, IRS Commissioner Chuck Rettig played up the scope of the so-called “tax gap,” or gap between what taxpayers paid and what the IRS believes it is owed. As a result, congressional Democrats with dollar signs in their eyes proposed to give the agency all kinds of wide-ranging and privacy-violating enforcement powers.

Long story short, the IRS is not your friend, and letting an agency that is not your friend design your tax filing software is a recipe for overpaying. Such IRS-designed software would doubtless use the strictest-possible definitions of eligibility for deductions, credits, and exemptions, and pressure taxpayers to avoid claiming these benefits if they are not completely certain they qualify. Unfortunately, given the monstrous complexity of the tax code, absolute certainty is often hard to come by.

There’s another reason to be skeptical of IRS-run tax filing — the ability of the IRS to provide and maintain this service is questionable at best. Not only has the agency proved incapable of fulfilling very basic responsibilities to taxpayers, it has repeatedly demonstrated the technological ability of an octogenarian. While other organizations — public and private — have adopted tools like virtual chat, secure document sharing, and centralized user accounts, the IRS has repeatedly failed to do so.

The solution to this problem should come not from the IRS, but from Congress. The 2017 Tax Cuts and Jobs Act made progress in simplifying the tax code, but far more is needed. If taxpayers want an easier tax filing experience without having to let the fox into the henhouse, the only solution is a tax code that makes filing taxes less arduous.

Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government. 

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