E-Filing Tax Returns, Whoohoo!
Things are about to get really exciting: I’m going to talk about e-filing tax returns, perhaps the most nerve-racking and boring subject ever. However, there is good news. California has a program called ReadyReturn that fills out half the form for you with all the information the state has already collected. For those of us who aren’t Californians there is still hope. Obama pledged on the campaign trail to direct the IRS to
[g]ive taxpayers the option of a pre-filled tax form to verify, sign and return to the IRS or online. This will eliminate the need for Americans to hire expensive tax preparers and to gather information that the federal government already has on file. (Politifact)
Now what’s the bad news? Intuit, owner of Turbo Tax, is rightfully scared that if filing taxes becomes easy enough to do on your own, you won’t pay them to prepare your taxes. So, they’ve invested over $1.25 million on lobbyists and $2.12 million on campaign donations in the state since 2005 (LA Times). That’s a lot of money, and their only ask is to prevent this pilot program from going statewide. Now in addition to the glowing tax payer response to the quality of the program,
it [also] costs California $2.59 to process a paper return, and only 34 cents to process a ReadyReturn, the state says. For the coming fiscal year, it expects that the program will save about three times as much money as it costs to operate, and that’s assuming that only 160,000 of the two million eligible taxpayers use it. (NYT 01/24/2010)
Sadly, Intuit — rather then focusing on improving services like Mint, a Web 2.0 financial planning software — is asserting its role as a legacy industry. There is a reason the American people believe that government is innately less efficient then industry, but what many fail to realize is that industry often times actively prevents better governance. No where is this more clear then in the world of e-governance.
