If you did your own tax returns this year, raise your hand. Just as I thought.
Whether you go to a service or have your own CPA, you pay a lot of money to get your taxes done. That’s unfair. But you know what else is unfair? That the accounting by which it is determined how much money we must mail to the IRS is unfathomable to all but specially-trained experts.
With that in mind, I urge you to read in full the letter former defense secretary Donald Rumsfeld sent to the IRS yesterday. The letter, an annual affair, is addressed to “Sir or Madam” and in it Rumsfeld confesses that like most Americans he has absolutely no idea if his taxes are correct.
The tax code is so complex and the forms are so complicated that I know that I cannot have any confidence that I know what is being requested and therefore I cannot and do not, and I suspect a great many Americans cannot know, whether or not their tax forms are correct.
As in past years, I have spent more money than I wanted to spend to hire an accounting firm to prepare our returns, and I believe they are well-qualified.
This is a note to alert you folks that I know that I do not know whether or not my returns are accurate, which is a sad commentary on governance in our nation’s capital.
Here’s a proposed solution to the problem that I really, really don’t like:
Some tax experts like Austan Goolsbee say one solution could be to have the IRS, which already receives income information from employers and banks, put together federal tax returns for people with simple tax situations. Goolsbee estimates that up to 40% of Americans would be able to take advantage of “return-free filing” and that it would save them more than $2 billion a year in tax preparation fees and 225 million hours of time.
Oh, yeah, I want the IRS telling me how much I owe. It doesn’t have a vested interest in bilking me, does it? Nah. Picture this: a fledgling Lois Lerner doing your tax forms for you. Ms. Lerner, you’ll recall, is the IRS official who claims to have taken the Fifth (that’s up for debate) when asked about the IRS targeting of conservative organizations.
The IRS scandal should provide those who want to reform the tax system some ammunition. Every April 15, Steve Forbes' idea of a flat tax and a system whereby the average citizen can do her own taxes and file on a postcard sounds appealing.