Shutting Down Virginia’s iFile
Okay, this one’s personal. For years I’ve filed my state tax return using iFile, Virginia’s free on-line tax filing service. I do that partly because I’m cheap—I don’t want to pay Intuit $15 to send my return electronically—and partly because it reduces errors and saves the state money.
But this year the General Assembly, with the concurrence of new governor Robert McDonnell, voted to end the iFile program. So next year I’ll go back to mailing in a paper return. A 44-cent stamp costs just 3 percent of Intuit’s bill. I did say I’m cheap, didn’t I?
Roughly 300,000 Virginians will use the program this year—it's clearly popular. So what prompted the state to drop it? It seems that the General Assembly agreed with Delegate Kathy Byron (R-Campbell) that helping people file their taxes is not a “core service of government.” Like all states, Virginia has budget problems and needs to cut costs. Doing away with iFile will save the state roughly $50,000. That assumes, of course, that current users don’t decide to file by mail. At about a buck a pop to process paper returns, the state comes out a loser if many former iFilers choose that route.
Whether or not it’s false economy to end iFile, I question the logic of the state’s choosing not to make it easier and cheaper for people to file their tax returns, especially when it saves the state money. Maybe, as some commentators suggest, it’s kowtowing to tax preparers, who lose business to do-it-yourselfers. Or maybe it’s intended to make taxes hurt more and build pressure against them. But as long as we want the state to provide those core services, we need revenue to pay the bills. Why not make tax collection as easy and economical as possible?