Congress Poised to Help Tax Prep Lobby Keep Bilking Americans

By Libby Watson | April 9, 2019 | 4:37pm

Congress

Last year, during tax season, I wrote that every year, we are reminded that the tax preparation lobby ensures that filing taxes remains complicated and expensive:

Every year, the media reminds us that other countries don’t make you do your own taxes, that it doesn’t have to be this way here, that there are proposals for making the IRS develop its own free tax filing software or simply fill out your damn taxes for you, and that, despite all these good ideas, we cannot have this beautiful world because of Big Tax.

The story has been written so many times—including by me, at a site that had already done the story in years past—and yet every year it remains relevant, meaning Vox can just update its post from last year with a dab of fresh information and a new publication date. Almost every outlet has covered this racket at some point: NBC, CBS, the Los Angeles Times, The Week, ProPublica, Mic, NPR. The list goes on.

I regret to inform you that, despite the stream of annual reportage, the situation remains exactly the same this year.

This year, I regret to inform you that the situation is not exactly the same. It is, in fact, much worse.

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According to ProPublica, Congress is poised to pass a bill—with bipartisan support—that would permanently ban the IRS from creating its own alternative software to applications like TurboTax, a “long-sought” goal of the tax preparer industry. The bill, the Taxpayer First Act (fuck off!), made it out of the House Ways & Means Committee last week.

The insultingly named Free File Alliance, a group of tax preparers, has long benefitted from the existence of the IRS’ Free File program, which essentially just provides links to tax preparers’ free offerings but doesn’t prevent those sites from upselling customers on tax prep products they don’t need. Almost 100 million people are eligible to file for free because of their income, but only three million people a year do so.

In 2016, Sen. Elizabeth Warren’s office put out a policy paper detailing how the tax prep lobby has prevented the IRS from exploring its own tax filing software. In 1998, Congress required it to develop procedures for return-free filing by 2008; in case you didn’t notice, that never happened.

But not all Democrats are as good as Warren on this issue; far from it. Eighteen Democrats and 10 Republicans are cosponsors of the bill, which is supported by Americans for Tax Reform, Grover Norquist’s right-wing group that opposes basically all taxation.

In 2019, not only do we have the insane system of every individual having to file taxes themselves despite the IRS already having all the information it needs to calculate those taxes for the majority of filers, but we have prominent Democrats helping to ensure that this remains permanently the case. Fixing how taxes are filed is something very simple that would nevertheless help millions of Americans, saving them time and money. This is something that Democrats, ostensibly the party of consumer protections, do not want to do. They should have to answer for why.