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Thursday, April 13, 2006

Federal ReadyReturn?

Readyreturn_2Irs_logo_235Interesting article in today's Wall Street Journal:  Letting the IRS Do Your Taxes for You; Agency Has Enough Data To Fill Out Many Returns; Tax Preparers Resist Proposal, by Robert Guy Matthews:

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

Since employers and banks and other financial institutions send information on earnings, interest income, dividends and mortgage interest directly to the agency, some academics and economists say the IRS should go ahead and perform the role of tax preparer -- and save many people a significant amount of time and money. A number of tax-preparation companies dispute the idea's validity and are fighting against it, as is the Bush administration, which has also expressed concern about the cost of such a program.

Last year, California launched a pilot program in which it filled out state-tax returns for about 11,500 residents. It plans to duplicate the program this year for 2005 tax returns....>

"The idea is to reduce the burden on taxpayers," says Joseph Bankman, a professor of law and business at Stanford Law School....

Mr. Bankman says the technical hurdles aren't insurmountable. Two economists, Peter Orszag of the Brookings Institution, a Washington, D.C., think tank, and Austan Goolsbee, a University of Chicago economics professor, are studying how to make it easier for the government to prepare tax returns by using information technology. They plan to publish their findings later this year as part of the Brookings-affiliated Hamilton Project, which aims to develop and promote new economic-policy ideas.

For TaxProf Blog coverage of the California ReadyReturn Program, see:

http://taxprof.typepad.com/taxprof_blog/2006/04/federal_readyre.html

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