Could IRS streamline the tax filing process?

The Kansas City StarApril 13, 2010 

As we trudge to our accountants with bags of receipts, click anxiously through store-bought software or bravely attack the 1040 with pencil and eraser, some 2 million Californians have a much easier option.

The state did their returns for them. They need only check to see if they agree with the figures and assumptions calculated for them and computer-click their way to completion.

Some say Uncle Sam ought to try the same thing.

After all, life only gets easier for the Internal Revenue Service when the forms arrive electronically — free of smudges, math errors and sloppy handwriting.

In all, Americans spend $30 billion a year just on preparing their tax forms (a figure that excludes corporate and small business filings or tax planning). As a presidential candidate, Barack Obama pledged pre-filled forms that we could "verify, sign and return."

California prepares state income taxes for hundreds of thousands of its residents just like that. It offers the free service at a cost to the state of less than $1 per filer.

"The IRS could do that, too," said Joseph Bankman, a Stanford University law professor who has championed the approach.

To be sure, millions calculate their ultimate tax bill with a minimum of anxiety and a reasonable confidence.

But a move is afoot to push the IRS toward more digital help for the worried remainder who anticipate April 15 as if it were root canal — fretting with their accountants, dashing to H&R Block offices or buying computer programs like those offered by Block and competitor Intuit's market-leading TurboTax.

Change won't come soon. Kansas City-based Block and the tax preparation industry are opposed, and the IRS is occupied with other reforms.

To read the complete article, visit www.kansascity.com.

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