Not so long ago, I read a story about a woman who, while cleaning her house, inadvertently shattered one of those energy-saving compact fluorescent lights with the end of a broom handle.
Now most of us would have simply grabbed a dustpan and a broom, swept the contents into a plastic garbage bag and vacuumed any remnants just to be safe. But trying to be a good citizen, she made a series of calls about the proper disposal procedure. Understandably, her first call was to the manufacturer. In a dizzying series of referrals worthy of a Saturday Night Live skit, she was directed to one government agency after another before finally getting instructions from some lower-level bureaucrat at the Environmental Protection Agency who nearly levied her with a fine.
The lesson here - nothing done via government channels can ever be considered a shortcut.
Which sort of brings me to the topic du jour - tax preparation.
Last month, Rep. Jim Cooper, D-Tenn., introduced H.R. 1069, the Simple Return Act. The legislation would allow the IRS to fill out a basic tax return for every American with the financial information it already receives from each taxpayer's employer and financial institution: W-2s and 1099s. Every taxpayer would have the opportunity to review and sign the government-prepared return, or throw it away and fill out their return on their own. The Simple Return could be used by anyone with basic tax information. Estimates say that roughly 40 million taxpayers would be able to use this service, translating into a savings of some $2 billion in preparation fees and 225 million hours of preparation time. Cooper and other proponents maintain that savings could reach $44 billion over 10 years.
Wait. Didn't we see this movie before?
Several years ago, the idea was floated by Democratic presidential contender John Edwards. But considering what else transpired on the 2008 campaign trail, the former trial lawyer may have been more preoccupied with a comely documentary filmmaker than a sincere belief in economical tax prep.
And those of you with decent long-term memories may remember that the idea was proposed circa 1986 by then-President Ronald Reagan, who ordered the Treasury to study the Simple Return. But implementation of the project was reportedly hamstrung by what would today most certainly be considered primitive technologies.
Now far be it from me to argue against anything that streamlines the tax arena. But let's be realistic for a moment and consider the ramifications of this program. If we're to believe the $2 billion in savings from having the IRS compute your 1040, then I'm sure the folks at tax prep institutions such as H&R Block, Liberty and Jackson Hewitt wouldn't be too upset about losing significant revenues.That's to say nothing of the CPAs - either in firms or sole practitioners - the majority of whose income stems from tax prep. I'm sure the leadership and membership of the American Institute of CPAs would not exactly welcome the resolution with open arms.
Last, but certainly not least, there's the "C" word - cost. Does anyone think that an initiative requiring the manpower this has the potential to demand would not incur any extra cost to the taxpayers?
Does anyone else marvel at the irony in saving $2 billion in prep fees only to have your taxes go up to pay for the program?
Good luck selling that one to the deficit hawks circling Capitol Hill.
Or to a professional tax preparer, for that matter.
Bill Carlino
Editor-in-Chief
