The IRS already has all your income tax data – so why do Americans still have to file their taxes? (increase, Washington)

[mike1003]

https://news.yahoo.com/irs-already-i...130029063.html

Return-free filing is not difficult.


At least 30 countries permit return-free filing, including Denmark, Sweden, Spain and the United Kingdom.
Furthermore, 95% of American taxpayers receive at least one of more than 30 types of information

returns that let the government know their exact income. These information returns give the government everything it needs to fill out most taxpayers’ returns.


The U.S. system is 10 times more expensive than tax systems in 36 other countries with robust economies. But those costs vanish in a return-free system, as would the 2.6 billion hours Americans spend on tax preparation each year.

I hope that this happens while I'm still alive

It makes so much sense and like the title says, the IRS already has ALL the information!

[mojo101]

but they dont have the deductions which could lower your taxes.they dont know how many dependents you have,if you lose money in your business,any theft/casualty

[mike1003]

Originally Posted by mojo101

but they dont have the deductions which could lower your taxes.they dont know how many dependents you have,if you lose money in your business,any theft/casualty

A lot of people no longer have deductions since the standard deduction increased


https://www.nerdwallet.com/article/t...ons-tax-breaks

The standard tax deduction for 2021 and 2022


The standard deduction basically is a flat-dollar, no-questions-asked reduction in your adjusted gross income (AGI). The amount you qualify for depends on your filing status.

Filing status



2021 tax year 2022 tax year



Single


$12,550 $12,950


Married, filing jointly


$25,100 $25,900


Married, filing separately


$12,550 $12,950


Head of household


$18,800 $19,400



People over age 65 or who are blind get a bigger standard deduction.

[rjm1cc]

They do not know the income that was not reported - tips, handyman you hired, babysitter etc.

[hikernut]

There are lots of things which are not reported, such as rents received. Then there are thing which get reported incorrectly and need to be corrected, like some brokerage statements.

Also, the IRS doesn’t know what filing status you are going to use. Those are just a few issues, there are many more.

To do what you suggest would first require a massive simplification and cleanup of the tax code. Of course this will never happen because it’s loaded with all manner of lollipops that were paid for by specific lobby groups and even specific individuals in some cases.

[Strannik33]

The IRS might have a mound of data on everyone, but they cannot put it together. A bunch of forms from all sorts of banks and suppliers do not magically organize themselves in a tax return. If you ever filed a tax return -- as opposed to your parents filing it for you -- you'd see how complicated it is, using software or not.

Moreover, the people dreaming of a tax return on a postcard are missing the point. Yes, if all you have is a single job and a single bank account, your return could be on a (very large) postcard.

But unlike Europe and the rest of the world, America is a country of small businessmen. Seemingly everyone has some kind of business, from selling stuff on Ebay to being an AirBnb host. Their tax returns have Schedule C (unless organized as a corporation), which is anything but simple, with depreciation, inventory valuation, etc. These people deal with cost accounting issues, and there are many unclear situations that require judgement. Why do you think accountants are busy from now through April?

[ChessieMom]

Originally Posted by mike1003

https://news.yahoo.com/irs-already-i...130029063.html



I hope that this happens while I'm still alive

It makes so much sense and like the title says, the IRS already has ALL the information!

Um...no, the actually don't.

[albert648]

Because chances are, the IRS will probably screw it up.

[fishbrains]

Originally Posted by Strannik33

The IRS might have a mound of data on everyone, but they cannot put it together. A bunch of forms from all sorts of banks and suppliers do not magically organize themselves in a tax return. If you ever filed a tax return -- as opposed to your parents filing it for you -- you'd see how complicated it is, using software or not.

Moreover, the people dreaming of a tax return on a postcard are missing the point. Yes, if all you have is a single job and a single bank account, your return could be on a (very large) postcard.

But unlike Europe and the rest of the world, America is a country of small businessmen. Seemingly everyone has some kind of business, from selling stuff on Ebay to being an AirBnb host. Their tax returns have Schedule C (unless organized as a corporation), which is anything but simple, with depreciation, inventory valuation, etc. These people deal with cost accounting issues, and there are many unclear situations that require judgement. Why do you think accountants are busy from now through April?

You think that this is unique to the USA? That Europeans and others do not operate small businesses?

You are simply uninformed about the rest of the planet. There are many cottage industries around the planet.

[Okey Dokie]

Originally Posted by Strannik33

Moreover, the people dreaming of a tax return on a postcard are missing the point. Yes, if all you have is a single job and a single bank account, your return could be on a (very large) postcard.

Old joke about filing on a postcard:
Line 1: how much did you earn last year?
Line 2: send it in