The IRS estimates that filing the average 1040 consumes 16 hours and costs $270, or about 10 percent of the average tax refund this year. By comparison, filing your taxes in other developed nations is about as easy as smoking one of their weirdo short cigarettes.
In much of Europe, workers get a pre-filled form from their federal tax agency, typically view it online and can accept it, adjust it or, if they don’t have anything more fun to do (such as stewing up the stomach linings of sheep for a fresh batch of tripe), they can file their own tax return or hire a tax preparer.
Now maybe reading this makes you feel sorry for all those French who don’t get to spend the equivalent of two full workdays wrangling with “Form E-990 Schedule of Deductible Ennui.” Maybe there are lots of Germans who feel cheated that they don’t get the option to, “Check here if you, or your Gefährte if filing jointly, would like to donate $3 for the next blitzkrieg of France.”
But I suspect most of them would sneer at us Americans (OK, sneer more) if they knew that, simply to survive tax season, we collectively spent more than $31 billion on tax preparers, software, Scotch and Maalox.
No, that’s not an oldies band
That is why Sen. Elizabeth Warren of Massachusetts introduced the “Tax Simplification Act of 2016” last week, which would direct the IRS to establish a free online service to allow taxpayers to file their returns directly to the government with no middlemen.
As Warren and other critics of the current tax-filing circus point out, 70 percent of taxpayers don’t itemize and simply claim the standard deduction. Plus, our bosses and bankers already rat us out by sending mandatory copies of our W-2s, 1099s and the entire alphabet of various income statements directly to the IRS. All that remains is for the IRS computers to do the math and, for most filers, spit out a check.
We know the IRS can do that because the tax agency already offers to figure your tax if it’s fairly straightforward, with no itemized claims or income beyond wages, interest and other money that’s directly reported to the government.
“Congress should be making it easier for Americans to file their taxes each year, not bowing to the interests of the tax prep industry,” says Warren, who represents the actually Democratic wing of the Democratic Party. Adds co-sponsor Sen. Bernie Sanders of Vermont: “We must make tax filing as easy as possible, not direct profits to private companies at the expense of working families.”
To which H&R Block, the makers of all the Liberty Tax franchisees nationwide, said, “Sure thing. If you need us, we’ll be reprogramming our computers for something easier than income taxes, such as formulating a plan for the containment of ISIS.”
Ha! If you believe that, I would like to come and live in your magical fantasy land. And can I borrow your sparkly rainbow unicorn to ride over to the Big Rock Candy Mountain?
Intuit, the folks who make TurboTax, responded to the whole idea of return-free filing on Friday, noting that such a plan “does not advance taxpayer rights,” according to a statement sent to the New York Times by David Williams, Intuit’s chief tax officer. Williams also noted that “tax time is an empowering opportunity for all Americans to also take stock of, and ultimately improve, their personal and family financial lives.”
Is this a good time to mention that, during the tax filing season last year, Intuit sold 30.2 million units of Turbo Tax? Or that the company spent about $11.5 million on federal lobbying in the past five years? Or that even Warren has issued a report noting that “the IRS has surrendered to industry pressure and other efforts to block access to free and accurate return-free tax filing.”
As part of its lackluster Free File effort, the IRS promised it wouldn’t compete with the companies providing access to software for the program which, according to Warren’s report, is used “by only 3 percent of eligible filers and is described as a ‘maze of offerings’ that can trick taxpayers into purchasing unnecessary products.”
So, if you’re one of the millions of Americans sweating out Monday’s midnight tax-filing deadline, remember: You’re not panicked, you’re not confused and you’re not terrified that clicking the wrong box will cause you to owe $7,000 in tax on uncollected railroad retirement benefits.
Nope. You’re “empowered.”