When you're doing your taxes, you may engage in that obnoxious tradition of paying H&R Block or Intuit, the makers of TurboTax, a chunk of change for the privilege of filing your taxes digitally. It doesn't have to work that way, but thanks to greed and the U.S. Congress, it's probably going to stay that way. , a bipartisan bill coming out of the House Ways & Means Committee aims to ensure that filing your taxes remains a confusing and potentially expensive nightmare.
While Americans may be accustomed to preparing our own tax returns (and paying for the privilege), the governments of countries like Norway and Finland prepare tax returns for their citizens. They do so using the same kind of information from employers that, .
If the IRS were to develop its own similar system, then the work of processing taxes could be reduced to little more than rubber stamping, at least for the vast majority of workaday U.S. citizens whose taxes are relatively uncomplicated. This would , yes, but precedent in other parts of the world shows it is possible. What's more, politicians including Massachusetts Sen. Elizabeth Warren and former Alaska Sen. Mike Gravel have promoted the notion and as part of , respectively.
But the "" stands to outlaw such a change. Tucked away in section 1102 of the bill, which relates to the IRS Free File Program that ensures fee-free filing for people under a certain income threshold, is language that subtly prevents the IRS for developing its own system by mandating that the agency continue to work with the private sector in this endeavor. In other words, the legislation locks us all into the status quo.
On its face, the promotion of "free" filing might not sound too bad. , however, of eligible people actually use the Free File Program. That's in large part because companies that make for-pay software the very existence of the IRS program. It's natural that they would, given that the resulting confusion gives them an opportunity to funnel users' money into their pockets, some of which they spend to make sure that the sluice gate remains open. In 2018, H&R Block , more than any of the past five years. Intuit, for its part, , the most it has spent since 2014.
Now that the bill has been passed by the committee, it's . If it passes there and in the Senate, that lobbying money might well have paid off. And you'll be the one footing the bill.