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Elizabeth Warren Takes On Tax Preparation Industry With New Legislation To Make Filing Easier

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Elizabeth Warren Takes On Tax Preparation Industry With New Legislation To Make Filing Easier

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U.S. Senator Elizabeth Warren speaks with a fellow guest as they arrive for U.S. President Barack Obama to sign the Every Student Succeeds Act into law in the Eisenhower Executive Office Building at the White House in Washington, December 10, 2015. REUTERS/Jonathan Ernst

Reposted with permission from Alternet

With Tax Day nearing, Elizabeth Warren has introduced legislation that would simplify tax filing and lower the cost for Americans. The Massachusetts senator introduced the Tax Filing Simplification Act, which would direct the Internal Revenue Service to create a free tax preparation and filing service.

Warren explained the importance of the bill in a press release:

Congress should be making it easier for Americans to file their taxes each year, not bowing to the interests of the tax prep industry. The Tax Filing Simplification Act is a commonsense bill that would help taxpayers all across this country file their taxes with less stress and fewer costs, and it would push the IRS to use the authority it already has to simplify Tax Day for all Americans.

Americans pay an average of $200 a year in tax filing services, so it’s little surprise that the tax preparation industry opposes a shift to free filing. Intuit, the company that owns TurboTax, has spent over $13 million lobbying against efforts to simplify the process. A staff report, relesed by Warren in conjunction with the legislation, points out that:

The tax-filing burden is an essential part of the tax preparation industry’s business model, and the industry sees return-free filing as a fundamental threat to its operations. As a result, the industry has devised numerous ways to oppose a return-free filing system, spending millions of dollars lobbying Congress against return-free filing and mounting fake “grassroots” campaigns against return-free filing.

Elizabeth Warren certainly isn’t the first politician to call for free filing. The Obama administration supports it and a recent Vox piece quotes a Ronald Reagan speech from 1985:

We envision a system where more than half of us would not even have to fill out a return. We call it the return-free system, and it would be totally voluntary. If you decided to participate, you would automatically receive your refund or a letter explaining any additional tax you owe. Should you disagree with this figure, you would be free to fill out your taxes using the regular form. We believe most Americans would go from the long form or the short form to no form.

Read the complete text of Warren’s bill on her website.

Photo: U.S. Senator Elizabeth Warren speaks with a fellow guest as they arrive for U.S. President Barack Obama to sign the Every Student Succeeds Act into law in the Eisenhower Executive Office Building at the White House in Washington, December 10, 2015. REUTERS/Jonathan Ernst

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15 Comments

  1. JPHALL April 13, 2016

    It is a shame that something this simple will never happen!

    Reply
    1. Danattaylor4 April 14, 2016

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      Reply
    2. 788eddie April 14, 2016

      The next post, from Jessica Lumpkin, is from a spammer and should not be responded to, so this spammer claims no hits.

      Reply
  2. itsfun April 14, 2016

    Just what we need, the government telling us what we are eligible to receive back. Instead of getting a tax break, we would end up paying more and more until the Government just takes our whole pay check and gives us a allowance as they see fit.

    Reply
    1. CrankyToo April 14, 2016

      Just what we need: one more totally off-the-beam remark from one of the Memo’s least astute wingdings. Itsfun, itsfun, itsfun to be a moron.

      Reply
      1. itsfun April 14, 2016

        If anyone would know what a moron is, it would be you from your personal experience being one.

        Reply
        1. CrankyToo April 14, 2016

          So your answer is, “I know you are, but what am I?”

          What are you, like six years old?

          Reply
          1. itsfun April 14, 2016

            Anyone like you that can only call names and never have a original thought is a moron. You fit the bill.

            Reply
  3. Otto T. Goat April 14, 2016

    It’s not tax preparers fault the tax code is complex.

    Reply
    1. bobnstuff April 14, 2016

      Maybe if the IRS had to come up with a system to fill your taxes they my discover that simple is better. We like to blame the IRS for the tax code but Congress keep passing the tax loopholes that become part of the code.

      Reply
  4. Paul Bass April 14, 2016

    If you look at the actual bill, it is 3rd party provider information to only those taxpayers filing very simple returns who elect to use this service.
    Tax preparers win, consumers win, I see no problem with this bill, if you don’t want Uncle Sam to have Intuit do your taxes, don’t.

    Reply
  5. Beethoven April 14, 2016

    I don’t see it as a competition between tax prep services and the IRS so much as that Congress has made the tax system too complicated. Unless Congress simplifies the system, most people are going to continue to pay someone else to figure their taxes because they don’t believe they are capable of doing it themselves. For myself, I have never paid someone else to do my taxes.

    After I got my first computer, I created an Excel spreadsheet that did all my tax calculations for me; I simply had to know what information I needed to put into the spreadsheet, and how to create a spreadsheet. Then I transferred that information to the IRS forms by writing it in. When the IRS started insisting on e-filing, I started using TurboTax, only because it gave me a way to e-file; then I switched to H&R Block’s software because it cost less. I don’t mind paying about $40 a year for the software that allows me to e-file and get my refund back in a matter of 2 or 3 weeks, especially since it saves me the time I had to spend making sure my Excel spreadsheet was accurate and thorough. If this bill gets passed, I’ll probably continue to use H&R Block’s software program, because I’m inclined to trust its accuracy and completeness more than one developed by the IRS.

    Reply
    1. ralphkr April 14, 2016

      Ah, Beethoven, you brought back so many memories. I remember when I switched to MS-DOS and my first machine had a 10 Meg HD (will never be able to fill that up) and came with MS Office but Excel was such a klug compared to SuperCalc that I immediately deleted the MS Suite and stuck with SuperCalc, WordPerfect, and Cornerstone. I created a SS containing all of my income & expenses as well as tax computation but then the forerunner to TurboTax came out (cost $1 for a floppy that did your taxes & printed out the completed forms) so I used that for a few years as the price went up. Then TaxAct came out and it was completely free including E-File so I used it. I still use my SS (now ported to Lotus 1-2-3) to double check the tax program answers. This year I was shocked to discover that TaxAct demanded $30 upgrade to E-File. Nothing has changed on my return as far as income sources (pension, capital gains, dividends, interest) other than the amounts to report. Back in the Clinton days total income was about $120K, during the Bush calamity it dropped to $52K (investments do so WELL with Republican administration, snark), and now it is finally back above $130K. And people wonder why I fear having a Republican administration…well, one good thing about having a Republican president is that my Federal tax is deeply cut because my investment income dropped by over 60%.

      By the way, I once used H&R Block tax service (1966 before Internet & computers) because I could not find a tax form I needed. About 2 months after I filed the H&R Block prepared return I happened to be in a large city with an IRS office so I took my forms into the office and the IRS clerk redid the H&R Block return, helped me file an amended return. and got me over $400 refund. Needless to say, I have avoided H&R Block ever since.

      Reply
      1. Beethoven April 15, 2016

        You’re probably one of the privileged ones. Based on your statements, I would guess that your average annual income was much more than mine, as you indicate that for at least a few years you were making more than me and my wife combined, though both of us have advanced college degrees (beyond Masters level). Of course, I never took a chance of investing in the stock market in any way. I was raised by parents so conservative financially (not necessarily socially) that I put all my investments in safe Credit Union accounts. So I’ve never made a lot of money off my investments, but on the other hand, when the stock market crashed, I didn’t lose a penny.

        Reply
        1. ralphkr April 15, 2016

          True, Beethoven, I am one of the privileged ones who spent decades as a wage slave and finally reached the pinnacle of a base pay of $25K (supervising a crew of 40 to 65). Of course, I usually picked up an extra $10K by working all holidays, premium hours, and overtime but that does not count for pension computation. If I had merely invested in savings I would be struggling to get by on a my pension with a take home of about $2K a month but I made some good investments such as $16K in energy which now pays over $20K per year in dividends. By the way, I didn’t lose a penny in the latest market crashes but used the opportunity to increase my stock holdings. My parents were also very conservative fiscally but they also realized that you shall never get rich working for someone else and that money in the bank is just a way to go broke slowly so my father made his money with his small herd of Holsteins (about 250 head after calving) and investing in the stock market.

          Reply

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