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Re: A Simple Tax Reform
by
Robert D Flach
As I posted in my blog THE WANDERING TAX PRO when this idea first surfaced as one of Barack Obama’s tax plans, I certainly do not agree with sending “pre-prepared” short forms to taxpayers.
Taxpayers should be allowed to determine if they will claim the standard deduction – and not be told, or even suggested, by the IRS that this is what they should do. Individual situations change from year-to-year – how does the IRS know that a taxpayer is better off filing a short-form simply from his W-2 and Form 1099-INT information. Taxpayers should also be allowed to consult a competent tax professional to determine if the standard deduction or a short-form will result in the least tax liability.
Let’s face it. There are a lot of taxpayers who would save lots of money by itemizing or taking advantage of various other tax adjustments or credits – but who would simply sign a short-form and pay a lot more tax then they would or should have to if the IRS sent them a pre-prepared return and requested a signature.
And looking at the issue from the government side – who is to say that the only income a taxpayer has to report is included on the W-2 and Form 1099-INT information that the IRS has in its computer matching program. Besides, pre-printing and mailing out such forms would be a waste of the government’s money.
Actually I agree with the basic thought behind this totally unacceptable idea – that the current Tax Code is too complicated and needs to be simplified.
If the Tax Code itself were substantially simplified, with a flat tax and a system under which all taxpayers would file a simpler “short-form” (like the half-page return that had been suggested by the President’s Advisory Panel – remember them) than it might be ok for the IRS to send out pre-printed returns. But certainly not under our current tax system.
TWTP
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Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution. Read the Terms of Participation Recent Entries
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