Sunday, April 17, 2016

Elizabeth Warren Calls For A Better Tax-Filing System

Here is Senator Elizabeth Warren's latest e-mail to her supporters:

Each year, taxpayers spend an average of 13 hours preparing their taxes – and an average of $200 on tax preparation services and software. It’s crazy.

Why is it so expensive and complicated to do your taxes? Back in 1998, a Republican Congress passed – and President Clinton signed – a bill requiring the IRS to implement a simple “return-free” filing system by 2008. This system would give taxpayers the option of receiving tax returns already filled out for them with the information the IRS already has on hand. But nearly a decade after that system should have been completed, the Treasury Department still hasn’t fulfilled its legal obligation.

Instead, the IRS surrendered to pressure from the tax preparation industry – giant, powerful companies that make a lot of money off of complicated tax forms. Year after year, the IRS signs contracts with these private companies, agreeing not to create a free, online tax return preparation and filing service – even though it could save taxpayers time and money. And to make sure the IRS keeps tax filing difficult, the tax preparation industry spends millions of dollars lobbying Congress to block return-free filing systems.

The government works for American taxpayers – not for the tax preparation industry. That’s why I’m introducing the Tax Filing Simplification Act to help people file their taxes with less stress & fewer costs.

My new bill – cosponsored by Senators Ed Markey, Patrick Leahy, Bernie Sanders, Sheldon Whitehouse, Tom Udall, Jeanne Shaheen, Al Franken, and Tammy Baldwin – makes commonsense changes to the tax filing process:
  • It prohibits the IRS from making agreements with the tax preparation industry to restrict its ability to provide free, online tax preparation or filing services.  

  • It directs the IRS to develop a free, online tax and filing service directly with the federal government, instead of being forced to share your private information with a third-party.

  • It allows all taxpayers to download third-party-provided tax information that the IRS already has about you (like your W2 and 1099 income information) into a software program of your choice.

  • It creates a return-free option for those with simple tax situations, where the IRS would send qualified people pre-filled tax forms explaining how much you owe or how much you’ll be refunded, which taxpayers could then review, sign and file.  
Dozens of the country’s top law professors and economists have already supported this new bill, calling it “a much-needed improvement to our current system.” And Senator Sanders isn't the only Presidential candidate who backs the bill. Secretary Hillary Clinton also supports it, saying: “This important piece of legislation will help us build a better, fairer tax system.” Will you join them?

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