Rep. Richard Neal (D-Mass.) and Reps. John Lewis (D-Ga.) are attempting to pass the Taxpayer First Act, a law that will subject tax payer to the predatory practices of tax preparers and prevent the IRS from common sense reforms that will reduce not only the expense to the tax payer, but also increase efficiency and accuracy at the IRS.
Let me start with an anecdote. Several years ago a family who I know through a friend made a considerable sum of income through his contract work. The income was made in such a way that there was no estimated tax paid on it, and no tax due if the proper paperwork was filed at tax time This family went to a major income tax preparer to complete the process. At the time the tax industry made most of it’s money through usury loans, and obviously there would be no refund here, so the only money the preparer would make was the normal fee. I don't know exactly what went down, but the preparer left the family with the impression that they did not need file a tax return, the family did not, the IRS disagreed, and it ended costing the family a great deal of money to hire a lawyer to keep the wage earner out of jail.
The tax preparation industry is no friend of the average tax payer. Just two of the industry leaders spent 5 million dollars lobbying congress to prevent the IRS from providing the common sense services that would help the tax payer, and congress has consistently provided bipartisan support for the tax preparers over the citizens who they are supposed to serve.
In fact it would simple and make sense for the IRS to implement software that would save consumers millions and put the predatory industry out of business. The IRS already has most of the information on the average persons income, as anyone who has received a correction or an audit knows. It would be simple for the IRS to populate a tax form, send it to the taxpayer for approval, and save tons of money reviewing the tax form after the fact. It would be simple for a tax payer to log onto the IRS website, ask for a completed tax form, and then be presented with a tax estimate. The tax payer would simply need to provide bank information or other arrangements to receive their refund or pay the taxes. A payment plan could even immediately be set up.
The simplicity of the IRS developing such software and making life so much easier on the majority of taxpayers is indicated by the this bipartisan bill that bans the IRS from doing so, The tax preparation industry know it provides no real service, or at least no real service that the IRS could not provide cheaper and better, so it has bribed politicians to prevent the IRS from providing such services.
Can you imagine a world where your completed taxes are presented to you and all you have to do it accept the refund. Can you imagine a world where tax preparers are not allowed to defraud consumers with a useless tax anticipation loans, for which they charge an interest rate of 36%.
You can imagine, but if Richard Neal and John Lewis get their way, and we pass laws based on what it best for corporate interests and not the average consumer, we will never see it.