Can Free IRS Tax Planning Software Save the Taxpayer?

Now and then, various lawmakers suggest a move to have the INTERNAL REVENUE SERVICE provide free tax planning software to the public to save the taxpayers from the investment property on hiring professional tax preparers. The most recent proposal was advocated by Sen. Tag Kirk and Sen. Wang Durbin in mid-2011. The lawmakers argued that taxpayers spend a lot of money employing tax preparers. This may all be avoided if the INTERNAL REVENUE SERVICE provided free duty preparation software to all of them. However, even though such a move would help detail prepare their tax returns, you may still find some arguments against this type of thought. Some of the arguments carried by the opponents of the pitch are:

Complex Tax Code – The tax code has been changed so often because the tax law was passed in 1913. In fact, the tax code has been considerably altered 28 times, seeing that 1913. Besides the significant modifications, every year, Congress passes numerous modifications and alterations to specific tax code aspects. This has made the tax laws very challenging for the average taxpayer. Actually, some of the tax provisions stay unclear even to duty professionals and the IRS personnel. In fact, because this is such a significant issue, the Treasury Inspector General for Tax Supervision (TIGTA) releases a report each year that reveals large amounts of taxpayers’ money dropped annually because of a misunderstanding from the tax code. Therefore, the primary reason taxpayers will go to tax preparers to file their particular returns is the difficulty of the taxes (instead of the convenience of preparing the taxes via proxy).

IRS. GOV Budget Cuts – Another discussion against provisions of the IRS’s free of charge software is the budget slice on the IRS’s resources. The home Appropriations Committee’s subcommittee upon financial services reduced the RATES budget for the 2012 financial year. The committee authorized a budget lower than that of 2011 on the pretext that the Government needed to cut on spending, owing to the large Federal debt. The IRS may even need to cut jobs and to create a hold on its various growth plans. Therefore, the introduction of totally free tax preparation software intended for taxpayers may be least with their priorities at the moment. The no-cost software will cost funds the IRS cannot afford to exhaust; they will have to dedicate more funds to train people on using the free software program if such a maneuver were to be commissioned.

Too Much Info to the IRS – Relating to various surveys conducted during the past, many taxpayers avoid any immediate interactions with the IRS because of the unwillingness to divulge a whole lot of personal information to these people. Tax-preparation software will require the taxpayer to provide a lot of their very own financial information to assist all of them in preparing their taxation statements. Therefore, many taxpayers would stay away from the IRS’s free tax application in the dread that the IRS would get an excessive amount of their personal information.

There is Totally free Tax Preparation Software Currently. Another argument against the launch of free tax preparing software by the IRS is that there is already free prep software available. The Free of charge File Alliance and Drake Tax Software has provided free of charge filing services for a while. If the software was really the issue, then many taxpayers may not pay for professional preparers and, in turn, go for these free computer software, which is not the case. This highlights that tax intricacy, and not software convenience, is the central limitation for taxpayers and highlights their preference to find professional tax assistance.