When you’re a hammer, everything looks like a nail.
That’s the gist of critics’ arguments against the creation of a government-run tax preparation service. In short, the Internal Revenue would do the heavy lifting for taxpayers, calculating how much they owe for the year. Plans for this “direct file” tax return program were tucked into Joe Biden’s Inflation Reduction Act last year, as The Hill reported.
Massachusetts’ own Democratic Sen. Elizabeth Warren came up with the idea, reintroducing the Tax Filing Simplification Act in a bid to simplify the tax filing process for millions of Americans in the hopes of saving time and money spent on filing taxes.
We get it — no one looks forward to filing their taxes, and the prospect of just having the IRS do it for you is tempting. A question arises: do you trust the IRS to figure out your taxes?
You shouldn’t, according to a coalition of conservative groups led by Americans for Tax Reform President Grover Norquist. They assert that the government shouldn’t be helping Americans figure out how much they owe in taxes because the IRS has a vested interest in collecting as much tax revenue as possible.
A Pew Research poll last year found that two-in-ten Americans say they trust the government in Washington to do what is right just about always (2%) or most of the time (19%).
“Trust in government has remained at roughly this low level for more than a decade. Since the 2007-2008 financial crisis, no more than about a quarter of Americans have expressed trust in the federal government to do what is right all or most of the time.”
The groups are asking lawmakers to block direct-file system.
“Such a system would be an unprecedented expansion of the size and power of the IRS and should be opposed by Congress,” Americans for Tax Reform and allied conservative groups wrote in a March 22 letter to members of Congress.
“Government-run tax preparation would create a significant conflict of interest in which the IRS would be responsible for calculating a filer’s tax liability and for managing contested tax returns,” the groups wrote. “This would create an incentive for the IRS to overcharge taxpayers or withhold information from filers to maximize revenue.”
There is more than a simple wariness of the fox guarding the henhouse at work here. The groups say their concern “is only bolstered by the IRS receiving $80 billion in increased funding from the Inflation Reduction Act to ramp up audits of American taxpayers with a clear mandate to maximize the amount of tax revenue collected from filers.”
Coupled with progressive cries to tax the wealthy, the mood on Capitol Hill is high on raking in revenue.
Warren pushed back: “People who want to block Free File are doing so to try to make paying taxes as cumbersome and painful as possible for everyday taxpayers. That’s just playing politics at its ugliest level,” Warren said in response to the letter.
Playing politics is definitely at hand here – and that hand wants to grab taxpayers’ wallets.