Bipartisan Taxpayer First Act Eliminates Opportunity for IRS to Create Automatic Tax Filing System
COMMENTARY

April 12, 2019 by Sean Trambley

Tax season is upon us, and this year it seems many Americans are frustrated with smaller refund checks after the 2017 Tax Cuts and Jobs Act has failed to live up to the hype for most working families.

But in a major boon to tax preparation companies like Intuit, makers of TurboTax, and H&R Block, Congress seems intent to lock the current convoluted tax system in place at the expense of taxpayers.

On Tuesday, the House passed H.R. 1957, the Taxpayer First Act of 2019 with bipartisan support. This bill, while including important provisions to improve service, increase enforcement on tax avoidance, and modernize the IRS, includes a provision eliminating the popular Free File program.

Free File, created in the early 2000s, mandated that tax preparation companies provide free software to low income taxpayers. The Taxpayer First Act would enshrine this program into law, rather than allowing the IRS to create its own automatic tax-filing system that would eliminate the headaches induced every April by the complicated tax filing system currently in place.

This is essentially an off-ramp from a long-promised, simpler tax system that would make it easier to file for the vast majority of taxpayers.

The IRS has a trove of information on each and every taxpayer in the country and collects enough information to simply send a tax form that would need to be simply verified, signed, and returned.

President Ronald Reagan proposed just such a system in the 1980s. President Barack Obama endorsed the concept in 2008 while running for office. And, former House Speaker Paul Ryan and other Republicans have campaigned on ideas to simplify paying taxes to a form the size of an index card.

The Taxpayer First Act would essentially put these proposals in the dustbin and provide customers for life to large tax preparation companies in an act Vox describes as “one of the most blatant pieces of corporate welfare in years.”

Intuit, the maker of TurboTax, has spent years lobbying against the federal government creating a system that would essentially put them out of business. Opponents say that creating an automatic tax filing system on behalf of taxpayers would cost too much taxpayer money.

This week, the House of Representatives agreed with these sentiments on a bipartisan basis, likely cementing the arduous process of filing taxes as an American tradition.

Text of the Taxpayer First Act can be found here, along with a section summary here. The bill now heads to the Senate for consideration.

Taxes

Trump May Try To Bolster Economy With Payroll Tax Cut Economy
Trump May Try To Bolster Economy With Payroll Tax Cut
August 20, 2019
by Dan McCue

WASHINGTON - President Donald Trump said Tuesday that his administration is considering a temporary payroll tax cut as a way to bolster the U.S. economy though he continues to insist the nation is not inching toward a recession. "I’ve been thinking about payroll taxes for a... Read More

Sherill, Gottheimer and King Move to Keep Treasury From Blocking Charitable Contributions Congress
Sherill, Gottheimer and King Move to Keep Treasury From Blocking Charitable Contributions
August 10, 2019
by Sean Trambley

Representatives Mikie Sherrill, D-N.J., Josh Gottheimer, D-N.J., and Peter King, R-N.Y., have introduced H.J. Res. 72 to overturn U.S. Treasury Department regulations that bar the deduction of charitable contributions from federal taxes.  The bipartisan action comes after the Treasury, in June, barred municipalities from creating work... Read More

New Jersey Governor Signs New Legislation and Temporarily Freezes Part of Budget State News
New Jersey Governor Signs New Legislation and Temporarily Freezes Part of Budget
July 11, 2019
by Elin Johnson

New Jersey Governor Phil Murphy signed several pieces of legislation this past week, including bills that expand patient access to medical marijuana, ensure the health benefits and compensation to 9/11 responders, and prohibit utilities from cutting the power off on residents who rely on life-saving medical... Read More

Nonprofits Worry As Evidence Mounts That 2017 Tax Cut Led to Less Giving In The News
Nonprofits Worry As Evidence Mounts That 2017 Tax Cut Led to Less Giving
July 11, 2019
by Dan McCue

WASHINGTON - The nonprofit community tried to warn Republican lawmakers on Capitol Hill that the 2017 tax bill would hurt charitable giving. Now, nearly 20 months after President Donald Trump signed the Tax Cuts and Jobs Act into law on December 22, 2017, all signs point... Read More

House Democrats Sue Treasury Department Over Trump Tax Returns Litigation
House Democrats Sue Treasury Department Over Trump Tax Returns
July 2, 2019
by Dan McCue

WASHINGTON -  House Democrats sued the Trump administration in federal court Tuesday for access to President Donald Trump's tax returns, setting up a legal showdown over the records. In a complaint filed in the U.S. District Court for the District of Columbia, the House Ways and... Read More

Federal Debt on Track to Reach 'Unprecedented' Levels, CBO Says Economy
Federal Debt on Track to Reach 'Unprecedented' Levels, CBO Says
June 25, 2019
by Dan McCue

WASHINGTON - The federal debt is on track to reach unprecedented levels in the next 30 years and will rise to 144 percent of the nation's gross domestic product by 2049 if current laws are maintained, the Congressional Budget Office said Tuesday. Each year, the nonpartisan... Read More

Straight From The Well
scroll top