Will Congress Prevent the IRS from Providing Tax Applications

ProPublica published another article today with details of Intuit’s effort to prevent the IRS from providing a web site for filing your taxes. See Inside TurboTax’s 20-Year Fight to Stop Americans From Filing Their Taxes for Free The bait and switch techniques used in their "free" offering would be fodder for a CFPB investigation if they were still legitimate.

Today I came across a post on ProPublica.org exposing an effort in the United States Congress to prevent the Internal Revenue Service from providing any form of tax preparation software. You can find the full text at Congress Is About to Ban the Government From Offering Free Online Tax Filing. Thank TurboTax. If you would like to see how the rest of world handles tax filings you might want to look at a slightly dated transcript from PBS Newshour.

The effort is instigated by Intuit, maker of TurboTax and H & R Block. They seem to fear that if the IRS provided humane service to its constituents they will somehow loose their profits from providing software and tax filing services. I think they underestimate the desire of most Americans to avoid thinking about finance and also avoiding any semblance of interaction with their government.

Here is what I would prefer to see. The IRS has all of our legally transacted income, and probably most of our expenses available in its data stores. They should provide an API to surface this information. This would benefit the tax preparation companies as much as individual tax filers. They should also provide an API for filing tax forms. We could then create a Code for America project with developers and tax experts to provide this as a community supported application.

Government should be open. If for profit enterprises want to provide a polished application that may provide extended features or audit probability scores for a fee, people can use these services. The rest of us can contribute to making tax filing for everyone a painless experience.