It is as good a day as any for a tax bill.
U.S. Rep. Jim Cooper, D-Tenn., will use national tax day to introduce legislation that could radically simplify the way some 40 million Americans file their returns each year.
The idea, which Cooper calls a “simple return,” is as easy as it sounds: Rather than having to spend a few hours filling out oblique tax forms, yours would arrive from the Internal Revenue Service already filled out. You would only need to approve it.
“I think it would really reverse the hassle of income tax and put all the burden on the government, make government work for you for a change,” he told The City Paper.
The IRS maintains databases of tax-identification information submitted by employers, banks and so forth; in other words, for the simplest of tax returns — W-2 and 1099 forms with no itemizations — the agency could theoretically deliver them with all pertinent information submitted. The filer would have the choice to approve it as-is, file his own return, or request amendments.
“You don’t have to accept the IRS return,” he said. “It’s your choice. You don’t even have to like this approach. I’m putting it out there to listen to people and see what they say.”
Cooper also said he wasn’t sure how much more it would cost the government in time and pay to institute such a system, although he acknowledged there would be a cost. However, he said an estimate from the Department of the Treasury said overall consumer savings could hit $2 billion.
At least one state already offers such a program. California’s ReadyReturn is a free service that has grown popular on the West Coast. Between 2004 and this year, the number of filers grew from 12,000 to more than 60,000, with nearly all saying they would use the program again.
“Why doesn’t the government make it easy to do this online?” Joseph Bankman, a Stanford University law professor, told The Kansas City Star for a recent story. “We know it can be done. It’s just a download away.”
Cooper said he expects opposition from the tax preparation industry — everyone from H&R Block to TurboTax — which pulls in some $30 billion a year.