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Letting the IRS Do Your Taxes for You





This kind of proposal will surely meet huge headwind from the commercial tax preparation business. A more plausible proposition is to provide a reliable feed of automatically collected information to these tax preparation firms to save time for tax filers and tax preparers.

From Wall Street Journal:

Imagine that filing your tax return was as simple as receiving a completed form from the Internal Revenue Service, signing it, then waiting for a refund or writing a check.

It isn't so far-fetched. For many of the taxpayers scrambling to meet next week's filing deadline, the IRS already has most of the data it needs on file.

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As appealing as the idea may sound, taxpayers shouldn't expect any such change soon, due to a host of technical and political challenges. "This is something that sounds pretty easy and obvious on the surface," says Charles Rossotti, who studied the issue when he was IRS commissioner from 1997 to 2002. "But there are some very significant practical problems that rule it out."

For one thing, he says, the IRS doesn't currently have the manpower or computer power to quickly handle and tabulate the reams of financial information from employers, banks and brokers in a timely way. That means potential refunds could be delayed.

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