Trust Us: IRS Wants to File Your Taxes for You
by Tom GiovanettiThe Internal Revenue Service (IRS) loves you and has a wonderful plan for your life. It wants to ease your mind about compliance with the tax code and make April 15 as stress-free as possible.
Sound too good to be true? Of course it is. Their real goal is to extract more tax dollars out of your pocket without having to muster the political courage to advocate a tax increase, and to do so in the most cynical way possible—by taking advantage of the least-sophisticated and lowest-income workers.
Some of our elected officials and the revenue establishment are convinced that there is a $345 billion annual “tax gap” between what people actually owe or should be paying and what the IRS actually collects. Of course, in a voluntary compliance system—the alternative to which is a police state—there is always going to be some gap in compliance. Not surprisingly, the IRS doesn’t mention the certainty that many people actually pay more than they owe because they fail to take advantage of deductions available to them.
Does the revenue establishment fault the tax code’s inherent complexity and Congress’ failure to reform it as responsible for the supposed shortfall? Guess again.
Slowly, over the past several years, the IRS has been insisting that more and more information be submitted from employers and from the savings and investment industry directly to them. At the same time, they’ve been tightening down on who can and who cannot prepare tax returns. Have you noticed?
And today, the IRS will hold its second hearing on what they call the “Real-Time Tax System,” which they claim is intended to give the IRS the ability to identify tax non-compliance in real time. Of course, the Real-time Tax System will require even more information from taxpayers, employers, banks and brokerage firms, but of course it’s being done to “reduce the burden for taxpayers.”
Of course it is. There’s actually a fairly insidious plan behind all of this. The “Real-Time Tax System” is just an appetizer for the pièce de résistance of the revenue establishment–a “return-free” system where the IRS would calculate your tax obligation for you (convenience!) and simply ask for your signature in large, friendly letters. In one fell swoop the IRS could claim to have the taxpayer’s best interests at heart, while making the calculation that reflects the best interests of the revenue establishment.
The return-free system (and thus the virtual elimination of voluntary tax compliance) is the ultimate goal of the revenue establishment. Before assisting in the destruction of the U.S. economy, Austan Goolsbee described the benefits of a return-free system in a 2006 op-ed in The New York Times. President Obama has endorsed return-free, and it was also discussed by the so-called “super committee,” which was specifically tasked with finding ways to raise more revenue for the government.
Make no mistake–Not only will the return-free system result in your paying higher taxes, it will require that substantially more of your personal financial information be disclosed to the IRS.
Perhaps the most cynical thing about the return-free system is that it takes advantage of the most vulnerable taxpayers—those with below-average incomes and below-average tax sophistication. What will they do when they get a bill from the IRS in a threatening envelope filled with legalese and threats of penalties? They’ll sign and pay up.
Our elected officials have constructed the most onerous and complicated monstrosity of a tax code imaginable, and instead of fixing it, they want to solve their revenue problem by extracting higher taxes from us without having the political courage to raise tax rates.
Our voluntary tax compliance system is a feature, not a bug. It’s a key indicator of self-government, one of the hallmarks of American freedom. The bug is our absurd tax code, which contains multiple and conflicting definitions of income, saddles the U.S. economy with an incredible compliance burden, and results in deadweight losses to the economy and to our global competitiveness.
If there is a tax gap, the fault lies at the feet of Congress for not overhauling our tax code into something that is functional and competitive in the 21st century. Fix that. In the meantime, I’ll prepare my own taxes, thank you very much.
Email this to a friend | Print |
Share on Facebook
| Tweet this
| 
Follow Us on Twitter
Subscribe via RSS
Got a Tip?
59 Comments
A Flat Tax would simplify things. A Fair Tax would make things "fair."
Unfortunately, nothing that comes from the federal government is ever simple OR fair.
"“return-free” system where the IRS would calculate your tax obligation for you"
Screw this.
I say we pay taxes and vote on the same day. And none of this witholding crap, pay up in cash at one table then move to another to vote.
It's no coincidence tax day is almost exactly 1/2 year out from voting day.
Ive got a BETTER idea. Take the IRS and the Fed and PUT THEM OUT OF BUSINESS.
When do we all get our bar-code tattoo's?
I am all in favor of the IRS preparing my tax return, because it would only be one line. Here it is:
How much did you make in the last calendar year _______________________
Send it in
Chortle.
Snort!
If they go down this lousy rabbit hole maybe they should trial it on all GOVERNMENT EMPLOYEES. You know all the Congressional Staffers who are in arrears???
You mean you didn't get yours yet?
You are not in compliance!
But a flat tax eliminates the ability to whine and moan about how much taxes a wealthy person (see Romney, Mitt) pays, even when they are doing so legally. It admits that the tax code is favored to those who can easily game the system and those who can influence it to their advantage. Politicians who mention a flat tax system are dismissed as "crazy." Remember Steve Forbes? But then those same people, especially in media, complain that the current system is not fair.
Since they want to file my taxes for me, they can go earn my wage also, pay my bills, take my kids to school and wonder how they are gonna contiinue to pay the high prices of feeding a family.
It's way past time to abolish the IRS and burn the entire tax code. It's beyond fixing.
It's going to get real crowded under the table!
Time to start standing at the 7-11 with all the other "non-documented guest workers".
And the nanny state continues to grow! What's next they are going to vote for us as well, oh yea I forgot that is already happening with ACORN.
More than that. All of a sudden, the 51% of the country who have NO skin in the game all of a sudden would actually give a damn what the tax rate is, and when a politician would mention increasing the rate, he'd feel the wrath of the ENTIRE US pop'l, not just the producers.
Who are you? How did you hack into Bo's account?
I've noticed that everytime I file taxes, I'm getting less back. I got back $200 more last year than I did this year. Rediculious.
It took a constitutional amendment to allow extortion by the government.
yes, the fault lies with Congress, but not sole for the tax code, but for SPENDING MORE THAN THEY HAVE IN TAXES!!
How about, "We are not allowed to ask 'how much you earned?' ?
forgive the punctuation brain fart
Abolish the income tax
A fair tax is an oxymoron.
It's not at all surprising, Mr. Giovanetti: When the socialists' hare-brained government schemes inevitably go haywire, their solution is invariably more government.
Whoa. I heard in lieu of bar codes we were to have computer chips inserted with GPS tracking capability.
"A Flat Tax would be the only Constitutional one (direct and apportioned.)
A Flat Tax RATE is a graduated tax"
And by that you mean an equal dollar amount for everyone? How would you make that work? Fictitious number, $10,000 tax amount for everyone. So the person making $500,000 pays $10,000, and someone making $12,000 pays $10,000?
Explain to me what you mean.
"A Flat Tax would simplify things."
Unfortunately, when the Powers That Be hear "simplify things," they think "digitize everything and place it under central control." They're already moving this way with health and school records. Don't believe for a second they don't have similar thoughts about monetary transactions.
Digital "currency" and SNAP cards for everyone would be the ultimate tool for controlling a rowdy populace.
If you want to change something, get rid of withholding. It was a temporary WAR measure for WWII – just another example of how wars grow government. Withholding is the single biggest factor in exploding tax and spend. End that and you have force-multiplied the opposition. Of course, now they have multiple wars to rationalize this illegal pre-taxation.
If all the govt employees, Buffett, and congressional members would pay their back taxes, we wouldn't be in such a mess.
The Chain of Obedience The death squads and concentration camps of history were never staffed by rebels and dissidents. They were run by those who followed the rules.
http://www.youtube.com/watch?v=6NcLNoxiPBk
Good point. And these people aren't stupid, they are evil.
This is political herion for simple minded useful idiots who would enslave their neighbors to "live comfortably" in perpetuity in the welfare state's dependency hammock, despotism disguised as economic freedom.
Americans want the IRS to do their taxes??
In other news, I have some swamp land in Colorado for sale. Let me know if you are interested. And if you want a bridge, a friend of mine might be willing to sell you his.
You hit that one right out of the park!!!!
I say the income tax has outlived its purpose, is nothing more than a wealth redistribution vehicle, and fuel for the engine of massive govt expansion. I would tell you what I really think, but big brother is always watching.
Thanks Washington76, I call 'em as I see 'em.
abolishing the income tax in one fell swoop is unlikely (unfortunately), but there is a way to get the ball rolling in that direction:
abolish withholding. If every employee were to receive their entire paycheque and had to pay their own taxes every two weeks, which is to say, if they actually had their own money slip through their own fingers, it would ignite a tax revolt in about 5 seconds. Then watch the pols run to get to the front of THAT parade…
"If you want to change something, get rid of withholding."
oops; I didn't read down far enough in the thread to read your suggestion before adding the same suggestion by you. My bad.
I'm fine with it…as soon as I have a job! /sarc
Anita Dunn
Obama campaign In April 2008, it was announced that Dunn, who had joined the Obama campaign in February, would be the director of communications, policy and research operations for Obama for America, where she held the title Senior Adviser and was one of the major decision makers of the Obama campaign. She was featured as one of four top advisers (along with David Axelrod, David Plouffe, and Robert Gibbs) in a 60 Minutes interview held after then President-elect Obama's November 4, 2008 victory speech at Grant Park, Chicago, Illinois. She was described, in the 60 Minutes interview, as, "a relative newcomer who handled communications, research and policy."During the presidential transition of 2008-09", Dunn trained White House Press Secretary Robert Gibbs.
Mao Tse Tung "Favorite Philosopher" http://www.youtube.com/watch?v=Fi1zg2NOCn8
And the NEXT STEP will likely have, your employer sending your paycheck directly to Unc Sam, so our Elite Ruling Class can decide how much you need to live a meager existance, and how much of your money to redistribute to those less fortunate, not just within the USA, but throughout the world.
We'll all have a chance to get OUR FAIR SHARE…. in our brave new fascist, morphing toward communist, world…
WTH???
.
I have a way to simplify things:
Total earnings * 9% = tax.
Thats a great idea, but then some people would spend the money and would need a bailout at tax time.
And it was the government that voted for the amendment.
We still would be in deficit mode. Government needs to STOP SPENDING. And close down all those unconstitutional departments like Ed, Ag, EPA, HUD, etc.
"I say we pay taxes and vote on the same day. "
Sounds good. However, don't forget that about 50% of Americans pay no income tax.
Adopt the "Fair Tax" and do away with the IRS and their stormtroopers.
Whaaaaat? We need a code to get in the bar? Man, I am really pissed off now.
If the IRS wanted to be a true full service agency then they should start paying my taxes for me too.
Very astute. One thumbsup
“return-free” system where the IRS would calculate your tax obligation for you"
F**k that on a stick with sauce….
Agreed. However, as long as the dims control the senate and the oval office, spending will not decrease. To shut down executive ordered agencies, we need a conservative president who will issue an order to dissolve them or at least downsize them.
This would lead to the IRS "issuing all payroll checks", you send in YOUR MONEY they tell you what you are "allowed to keep", despotic.
As a beancounter, I can tell you that all income that is paid is reported to the IRS. You need to either fill out a 1096 (associated with independent contractors – 1099s) or a W-3 (associated with employees wages – W2). The banks and financial institutes report their earnings through a 1099-INT or 1099-DIV. Even companies are required to provide K-1s to their investors.
What this will do is scrutinize everything they don't traditionally receive, namely charitable expenses, medical expense and job-related expenses. They will even scrutinize what people write off on Schedule C businesses for sole proprietors. I have two sole proprietorships and I can see how they may want to see every piece of paper to determine what I can write off as normal operating expense and what they might think shouldn't.
I've dealt with the IRS for years and I can tell you that they are the most inept group I've ever dealt with. To give you a good example, I consult for several startup companies. One company when from startup to a viable small business. They contracted a payroll company to handle that function. The payroll company's owners and employees started embezzling from the company, taking money from their clients and pocketing it themselves. Over 900 companies were affected. Do you think they set up a task force to help these companies get through the problem? Nope, they just continued to rack up penalty and interest charges. That company was guilty (and still is) of failure to pay the tax. I even faxed all the bank statements to them showing when the money was withdrawn. We even made good on the actual tax that was due, hoping we can get them to drop the penalties and interest. No luck.
Here are a couple other points that occurred. The IRS is first in line to collect the fines from this company. Next goes to the federal employees straightening out the mess and then the company (the victim) gets the crumbs. On top of this, the IRS is not going to prosecute these individuals, so they are walking around scott free with over $4M of ill-gotten gains.
So, do you think I really want to deal with them on my tax return? No way. I know the tax code and all the loopholes associated with it. And I take advantage of every one. If I can save $1, I will take it.
And this doesn't even address the number of people at H&R Block, TurboTax and other companies that will be unemployed because of it.
You give the feds an interest free loan of that much money?
Financial planners say you should aim at a zero refund. I suggest that we should aim at a $100 refund, just for a safety margin.
It's not a matter of how much you get back; it's a question of what percentage of what you make they take away. What you're getting back is your own money, which they never should have had in the first place.
The IRS will get what I owe them, when they are owed, and when Im #$% *^%@ good and ready and not one cent or second before!
The scumbags!,
I've got a bridge in Brooklyn. Real cheap. Sign here.
;-D
AMEN! AMEN! AMEN!!
The Fair Tax is better and puts the IRS entirely out of business.
I expect one day the government will collect all individual's money, and then return what they believe to be fair. From each according to their ability, to each according to their need. Similar to obamacare when it kicks-in. Fair distribution of medical care depending on the individuals worth to the collective.
http://biggovernment.com/jpollak/2012/01/27/obama...
You must be logged in to post a comment.