Tuesday, September 20, 2005
William J. Kambas (Ernst & Young) has published Reform and Modernization of the Tax Compliance Process, 108 Tax Notes 1447 (Sept. 19, 2005), also available on the Tax Analysts web site as Doc 2005-18311, 2005 TNT 181-40. The article responds to the earlier piece by Joseph Bankman (Stanford), Simple Filing for Average Citizens: The California ReadyReturn, 107 Tax Notes 1431 (June 13, 2005). Here is part of Mr. Kambas's Introduction:
In Simple Filing for Average Citizens: The California ReadyReturn, Prof. Joseph Bankman describes a simplified tax-filing program developed to streamline the compliance process. California's Ready Return program allows eligible taxpayers to receive state completed returns for review, correction, and subsequent remittance for final processing by the state. The program is based on the idea that governments already have enough information to provide prepared returns to large portions of society and therefore should. It automates portions of the tax compliance process.
Prof. Bankman believes that an automated tax return preparation program, if adopted by the federal government, will save taxpayers and government "time, money, anxiety, frustration and anger" thereby relieving the "headache of burdensome record-keeping, lengthy instructions, and complicated schedules, worksheets, and forms" that defines the tax compliance process for large portions of society.
Automation may be beneficial to the tax compliance process, but protection of taxpayers' personal data is an important aspect of the proposed procedural tax reform. Accordingly, the development of a data protection infrastructure should be part and parcel of tax compliance modernization. This article seeks to expand the discussion regarding the development and implementation of an automated system. It is intended to buttress Prof. Bankman's position by acknowledging the valuable contribution of modern technology toward an efficient tax compliance system. However, the article questions whether sufficient efforts have been taken to protect taxpayer data. In so doing, this article highlights some recent events that illustrate taxpayer data vulnerabilities and suggests methods of minimizing those vulnerabilities. This article concludes with a discussion of the shift in relationship between the taxpayer and the governments resulting from automation.
- Presentation to President's Panel on Tax Reform
- What Taxpayers Thought of ReadyReturn
- ReadyReturn: A Brief Explanation
- ReadyReturn FAQ
For press reports, see here.