America is exceptional in many ways. Not only did this country birth both Google Glass and JNCOs, we're also one of the few developed nations on planet Earth that doesn't have a government-provided tax-filing system. This is nuts! Maybe not as nuts as the fact that we're basically the only developed nation without a single-payer health care system and we actually elected the guy from Duck Dynasty to be President, but still: nuts!
If it were tax day in, say, Estonia, all you have to do is review a tax return that is prepared for you by the federal government. You read it. You sign it. That's it. They already have all the relevant information, so why not? In the U.S., in contrast, the IRS says that the average taxpayer spends 13 hours on this horrible task—the reward for which is either paying the goddamn government money or getting money you've already paid the goddamn government back. How is this possible?? This is the country that invented the chip clip and we can't even get a tax-filing system done right.
I'll tell you how it's possible: For decades, lawmakers have been in cahoots with tax-filing companies like Intuit, the maker of TurboTax, and H&R Block, and they've promised those companies that if they provide free tax filing services for taxpayers with an income under a certain threshold (which is currently $66,000), they won't put out a competing software of their own. And yet, despite that fact that the Free File Alliance, an industry group representing companies like H&R Block, says that 70 percent of taxpayers are eligible for these free filing systems, only an estimated 3 percent of taxpayers actually use them, ProPublica reports. This may be because those systems are mostly pure shit. If you've ever used TurboTax you've probably noticed: They say the service is free but the system is so confusing and cumbersome that you end up paying a fee just to get through the process without pulling all your own hair out.
This agreement between tax filing companies and the IRS could soon become permanent: Last week, the House of Representatives passed the ironically named Taxpayer First Act, a bipartisan bill that would actually make it illegal for the IRS to release its own tax-filing software to compete with the for-profits. This, of course, is very popular with the companies that make tax-filing software, like Intuit and H&R Block, which have spent $6.6 million lobbying Congress last year, as ProPublica also reports.
For most taxpayers, the passage of the Taxpayer First Act, which goes to the Senate next, will change nothing in the immediate future. It's not like the IRS was on the verge of releasing its own filing system anytime soon. And there are, to be sure, a few less terrible provisions in this legislation. It would, for instance, ban the IRS from using private debt collectors and allocate millions in funding for tax-filing clinics for low-income earners, which is supposedly why it received bipartisan support, including from Washington Rep. Suzan DelBene, who co-sponsored it.
Still, some consumer protection advocates are against this antiquated system, including Elizabeth Warren, who introduced the Tax Filing Simplification Act of 2019 last week, which would direct the IRS to develop a free, online tax preparation and filing service and would ban it from entering into agreements that limit its ability to create its own e-filing program. This act was co-sponsored by fellow presidential candidates Bernie Sanders and Cory Booker, and while you'd think legislation that makes paying taxes less painful would be a no-brainer, a similar bill introduced last year never made it out of committee. Will 2019 be any different? Too soon to tell, but meanwhile, if you fuck up your taxes today, don't be too worried: The IRS is so underfunded and understaffed that audits are reaching a low point. Of course, the people who really benefit from this are, as always, the ones with money to hide. Thanks Trump!
