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Treasury Should Immediately Simplify Tax Filing, 35 Groups Say

WASHINGTON, D.C. – The Biden administration and the U.S. Department of Treasury should immediately simplify tax filing for everyday Americans, 35 groups dedicated to social, racial, gender, worker, and economic justice said in a letter sent today. People with uncomplicated taxes should have the option of return-free filing – where taxpayers’ wages and data are pre-filled by the IRS – a process already used in other countries, the letter states.

American taxpayers spend an average of 11 hours doing their taxes and often pay $200 or more for paid filing services. Return-free filing not only would save Americans money; it would free up the IRS from having to process returns that contain simple, avoidable mistakes made by well-meaning taxpayers.

“Providing taxpayers with preliminary tax returns pre-populated with wage and other data already collected by the IRS through information reporting would not only reduce the burden on families who are struggling to make ends meet, it would reduce the errors and other problems that collectively add to the IRS’s backlog and to the demand for live customer support,” the letter reads.

The groups also called on the IRS to terminate the corporate-run Free File partnerships, which are ripe for self-dealing and confusing to navigate. Instead, a publicly-run free filing system could be the leading edge of the agency’s efforts to modernize its outdated technology.

“There should be no need for people with simple taxes to worry about the process of filing taxes or pay for an expensive tax preparation software or for paid preparers since the government already has the data it needs and can easily do the math for us,” said Susan Harley, managing director of Public Citizen’s Congress Watch division. “The IRS has been starved of resources and is now struggling to serve taxpayers despite its best efforts. Why not take away the need to correct simple errors or answer easy questions on the phone?”

“It’s honestly shocking that the corporate-run Free File program has been allowed to continue so long given how defectively it has been implemented,” continued Harley. “The IRS of the future must include a government-run online tax filing software. The agency has the authority to act now, and it should move forward with these changes not only to help American taxpayers but to help free up its resources moving forward.”

Public Citizen also submitted the group letter as a statement for the record in today’s U.S. Senate Finance hearing: “Spotlighting IRS Customer Service Challenges.” The submitted materials also call on Congress to increase the IRS’s annual appropriations and pass the Build Back Better Act, which would provide $80 billion for the IRS to modernize its technology, improve customer service, and strengthen enforcement against wealthy tax cheats and large corporations.