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This Tax
Day, Taxpayers Want Less IRS, Not More
[The Center Square] Daniel Savickas |
Taxpayer Protection Alliance
Even though it’s mid-May,
it’s tax season (filing deadline was May 17). And, once again, millions
of Americans found themselves going through the hassle of filling out
their tax returns. Many are left wondering if there is a better way to
file taxes. The process often seems like a government-sponsored
brainteaser to see if you can come up with the right number, and the
government will punish you if you guess incorrectly. So, proposals have
been put forth to have the Internal Revenue Service (IRS) pre-determine
a taxpayer’s liability and send them a bill. While this might seem a
better solution, nothing could be further from the truth. Handing over
filing duties to the government would amount to a reckless expansion of
IRS discretion and agency snooping. |
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 Despite these consequences, a proposal popularized by Sen.
Elizabeth Warren (D-Mass.) entitled the Tax Filing Simplification Act would put
the IRS in the driver’s seat. As with most legislative short titles, the
problems with the proposal are hidden by a misleading name. The IRS does not
understand the minutiae of every taxpayer’s life. Leaving the decisions up to
bureaucrats with less information at their disposal will simplify nothing.
Also, putting the filing in the hands of the IRS puts an unfair burden on
taxpayers should there be any discrepancies or disputes. Challenging the IRS on
tax questions is already complicated enough, given the agency’s deep
bureaucratic web. Imagine the increased complexity when the IRS becomes the
default decision-maker in tax filing. The burden of proof shifts far more
heavily on to taxpayers.
The IRS’s mission is stated very clearly in its name. It exists to collect
“revenue” as efficiently and effectively as possible. When Americans are filing
taxes, they look for exemptions and other provisions that will minimize their
tax burden every year. An agency tasked with generating as much revenue as
possible naturally has no interest in minimizing the amount of tax collected.
The IRS’s budget is more than $11 billion. Under recent spending proposals, the
agency stands to benefit from a 10 percent increase in the very near future.
Adding the cost of turning the agency into a tax filer for every American could
add billions of dollars to the IRS’s budget. All that hassle that hundreds of
millions go through every year will now be concentrated in one agency. That is
the exact opposite of simplification. This expansion of government size and
power would no doubt reflect in tax bills across the country – and then be
completed by the agency itself. It’s a head-spinningly foolish idea.
This would not be the first time such an idea has been tried.
In 1995, the IRS created CyberFile. The aim was for the IRS to develop a system
that would prepopulate tax information and do so in a paperless way.
Unsurprisingly, CyberFile was an unmitigated disaster.
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The Government Accountability Office (GAO) noted a
number of security issues with CyberFile. There were many incomplete
and inexact installations to the final program. It was a costly
effort that never got off of the ground. The sad reality is that all
this work and money got poured into trying to develop a government
version of a program that had already been successfully developed in
the private sector. The government’s effort to tighten its grip over
the tax filing process failed.
The IRS’s technological woes have not improved over the last 25
years. A recent report from the Treasury Inspector General for Tax
Administration found that well over 200 IT systems currently used by
the IRS are antiquated legacy systems. The IRS continues to develop
software to meet its needs, but produces systems that don’t have the
ability to interface with one another, making any effort to create a
seamless process a fruitless one. This is exactly what Americans
cannot afford when it comes to their hard-earned tax money.
This tax season, millions of Americans have inevitably been rolling
their eyes and exhaling deep frustrated sighs as they fill out their
returns. But the solution is not giving the agency that produced the
existing mess more control. Rather, policymakers should strive to
actually simplify the tax code and cut down on bureaucratic waste at
the IRS. Having the IRS fill out taxes for the American people may
seem like a good idea on the surface, but such a process would only
succeed in adding another layer of bureaucracy on top of an already
complicated system.
People want less of the IRS in their lives, not more.
Daniel Savickas is a policy analyst for the Taxpayers Protection
Alliance.
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