Senator Warren Proposes Return-Free Filing

By:
Chris Gaetano
Published Date:
Apr 14, 2016
CongressSenator Elizabeth Warren (D - Massachusetts) has proposed legislation that, if passed, would give taxpayers with simple tax situation to choose a new return-free option that provides a pre-prepared tax return with income tax liability or refund amount already calculated. This is similar to how taxes are done in other countries such as the U.K., and Estonia. 

Warren noted that the average American spends about 13 hours preparing and filing their returns, and will pay $200 for tax preparation services. 

"Congress should be making it easier for Americans to file their taxes each year, not bowing to the interests of the tax prep industry," said Senator Warren. "The Tax Filing Simplification Act is a commonsense bill that would help taxpayers all across this country file their taxes with less stress and fewer costs, and it would push the IRS to use the authority it already has to simplify Tax Day for all Americans."

In addition, the bill also: 
 
  • Prohibits the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services;
  • Directs the IRS to develop a free, online tax preparation and filing service that would allow all taxpayers to prepare and file their taxes directly with the federal government, versus third parties like tax prep providers (while the IRS already has such a service, this new one would be run entirely within the federal government);
  • Allows all taxpayers to download third-party-provided tax information that the IRS already has into software program of their choice; 
  • Mandates that these data and filing options be made available through a secure online function and requires any participating individual to verify his or her identity before accessing tax data.; and 
  • Requires that third-party income information be sent to the IRS earlier in the tax season, allowing the agency to cross-check this information before issuing refunds.

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