The State of California is currently piloting a new tax return system whereby the state tax authorities automatically complete the tax returns of those with simple tax affairs, although the experiment is unlikely to be repeated at federal level any time soon.
The 'Ready Return' system has been running in the state for the past two years. Under the scheme, some 50,000 taxpayers received state tax returns which were pre-populated, based on financial records held on file by the government. All the taxpayer then had to do was sign the return and send it back - provided that they agreed with the state's calculations.
To qualify for inclusion in the program, taxpayers must be single with no dependants, and hold only one job in the tax year in question. Also, they must not have earned interest on investments, nor have a home mortgage, nor own stock holdings or have itemized deductions.
About 10,000 have taken up the scheme, which cost the Californian authorities about $211,000 last year.
According to the Washington Times, it has been suggested by Austan Goolsbee, a University of Chicago economics professor, who is studying the idea, that if repeated nationally, the scheme would reduce errors and reduce the amount spent by the IRS on compliance.
However, the Bush administration is known to be opposed to the idea of the government moving into the tax preparation buisness. "We aren't tax-preparation people," Treasury Secretary John Snow told Congress recently. "There is a private market out there that does that and does it well."
Moreover, any move by the government to usurp a large chunk of the tax preparation business is likely to be fiercely opposed by companies in the industry. Well over half of the 135 million returns filed this year were prepared by a professional tax preparer, and it is estimated that 55 million returns would qualify for completion by the government if the Californian scheme were extended nationally.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment