Friday, March 18, 2011
Congressman Proposes Bill to Let IRS Prepare Taxes
Rep. Jim Cooper, D-Tenn., introduced the Simple Return Act (H.R. 1069). The bill would allow the IRS to fill out a basic tax return for every American with the financial information it already receives from each taxpayer’s employer and financial institution: W-2 and 1099. Every American would have the opportunity to review and sign the government return, or simply throw it away and fill out their return on their own.
“Here’s a simple idea for reducing the hassle of paying your federal income taxes,” Cooper said in a statement. “Make the IRS do your paperwork. They already have much of your tax information like copies of your W-2 and 1099s. Today they use that information to catch you if you make a mistake. Why not get the IRS to use that information to help you instead of punish you?”
The Simple Return could be used by anyone with basic tax information. It is estimated that around 40 million Americans would be able to use this service saving $2 billion in preparation fees and 225 million hours of preparation time. Converting that time into money, it is estimated that savings could reach $44 billion over 10 years.
The idea was floated 25 years ago by President Reagan, and he asked the Treasury Department to study the concept, according to an op-ed in The Tennessean written by CPA Mike Schmerling, which Cooper ran on his Web site. California has already run a successful pilot program using a Simple Return for state income taxes.
By Accounting Today