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Friday, September 30, 2016

On March 28, the U.S. Justice Department sought to close a nationwide chain of income tax preparation shops it accuses of fraud. The action underscores the potential for abusive business practices that taxpayers face because Congress has failed to embrace technology that would eliminate most tax returns.

The Justice Department wants a federal judge to shut down Instant Tax Service, whose sole owner is Fesum Ogbazion of Dayton, Ohio, saying he is responsible for “extensive and pervasive tax fraud.” It also sued four of his 276 franchisees. The company has not responded to the lawsuit.

Congress could easily eliminate fraud by abusive tax preparers, as is alleged in the Ogbazion case, and save taxpayers billions of dollars annually, by simply ending mandatory filing of tax returns for most taxpayers.

About 100 million taxpayers — those whose income is entirely from wages and retirement funds, and who do not itemize deductions — should not have to file returns. The government already has the information it needs to calculate the taxes these people owe, once they supply their marital status and number of dependents. It would not take much to automate their income tax payments, as many other modern countries do.

I put the chances of Congress taking such a sensible course at one in 84,000. That’s about the same as the odds of being indicted for a tax crime in 2011, based on an analysis of official data by Syracuse University’s Transactional Records Access Clearinghouse.

Congress will not act because individual income tax returns, which for most people are make-work that creates a drag on the economy, provide tidy revenues for Intuit, the maker of TurboTax software, H&R Block and other legitimate corporations that profit from preparing tax returns. These companies have considerable resources at their disposal to spend on lobbying politicians to keep the tax filing requirement. One sign of their determination: Intuit in 2006 donated $1 million in support of an unsuccessful candidate for California state controller who opposed optional state-prepared returns in California. Intuit has said there are serious problems with the program, which remains in operation, but in my view none of Intuit’s criticisms stands up to scrutiny.

  • Now I’m really depressed. If there’s slim chance of enacting automated tax collection for simple returns, then there’s even less chance of actually simplifying the tax code. I’ve always suspected that the tax code (and most legislation) is mainly a lawyers’ and accountants’ employment protection scheme.

    • EdC

      Amen

    • Christian Martin

      Damned straight. Things are going too good for the powers that be to change any or simplify any tax laws,tax codes or any other questionable laws or regulations. Ex: Drug war,War on Terrorism,prostitution,War on small farms/independent farmers,campaign finance reform,lobbying reforms,banking and investment regulations,precious metals and commodities exchange reforms…..Just to name a few. Ron Paul would fix a lot of these things including getting back some our rights that we have already lost but the Government and the companies and organizations that actually run the government would simply assassinate him in broad daylight just to prove a point…..like they did to J.F.K.

  • doghouse1

    The Jackson Hewitts and H&R Blocks have to contribute in a major way to the campaign coffers. The prices they charge for basic returns is excessive. The only real solution is to simplify the tax code. I wonder if the head of the IRS does his own tax return?

  • glorybe2

    Making electronic currency the only currency would cut tax cheats out completely. It would also stop almost all burglaries, property crimes and drug selling. It could even help to lessen adultry and other moral crimes.
    After all you can’t swipe a TV or a computer or a car and then sell it as it will show up as income and the path of all transactions should be maintained for all the world to study. The father who is dumping a fortune on booze and lap dances at the strip club but failing to pay his child support could be swept up instantly and forced to appear before a judge. Hookers would have a heck of a time as their tricks payments would be public information. Bribes and kick backs would become historic as the payments would be public information with a firm electronic compilation of events.
    We can make freedom a word that actually stands for something. Free from crime. Free from lies and deception are the tip of a huge iceberg.

  • 13th.amendment? you know the one about taxing wages? if you eleminate currency without fixing the country, you might as well just kill off all us 99% who survive only by beating the rich mans bs. legalise drugs, get the profit out, no more problem. same with prostitution. prohibition just makes criminals out of honest folks. get government out of the morals game , it has none.

  • the 13th amendment had the fix. to bad we don’t have any rights left in this country. the bushitters have made shure of that. government of , by , and for, the rich.