April 14, 2017

...AND CHEAPER...:

Filing Taxes in Japan Is a Breeze. Why Not Here? (T.R. REID, APRIL 14, 2017, NY Times)

When I told my friend Togo Shigehiko in Tokyo that Americans spend hours or days each spring gathering records and filling out tax forms, he was incredulous. "Why would anybody want to do that?" he asked.

What's going on in these countries -- and in many other developed democracies -- is that government computers handle the tedious chore of filling out your tax return. The system is called "pre-filled forms," or "pre-populated returns." The taxpayer just has to check the numbers. If the agency got something wrong, there's a mechanism for appeal.

Our own Internal Revenue Service could do the same for tens of millions of taxpayers. For most families, the I.R.S. already knows all the numbers -- wages, dividends and interest received, capital gains, mortgage interest paid, taxes withheld -- that we are required to enter on Form 1040.

The I.R.S. sends out a letter called a CP2000 Notice by the millions every year. This is the form that says: You entered $4,311 on Line 9b, but the reports we have on file say the figure should have been $4,756. I get these letters now and then -- the revenue service is always right -- and it makes me mad. If the government already has all this stuff, why did I have to spend hours digging through receipts and statements and 1099 forms to report what the I.R.S. already knows?

Questions like that have prompted some members of Congress -- including Senator Ron Wyden, Democrat of Oregon; Elizabeth Warren, Democrat of Massachusetts; and Dan Coats, a former Republican senator from Indiana -- to champion pre-filled forms. But their bills never went anywhere because the tax-preparation industry lobbies strenuously against them. The "Tax Complexity Lobby," as it has been called, includes big national preparers like H & R Block and tax-prep software companies.

Posted by at April 14, 2017 5:11 AM

  

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