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Christine Emba: Congress should ease the pain of filing taxes | TribLIVE.com
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Christine Emba: Congress should ease the pain of filing taxes

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Multiple forms printed from the Internal Revenue Service web page that are used for 2018 U.S. federal tax returns in Zelienople. If you don’t think you will be able to complete and file your taxes on time, request an extension. Filing an extension helps taxpayers avoid penalties for a late return, according to the IRS.

For the first time in a long time, I managed to do my taxes early this year.

My refund check arrived by mail. Opening it, I looked down at the (paltry) sum, sighed and placed the letter into my bag. And then it blew away.

Literally.

It blew out of my bag and down the street, vanishing as though it had never existed in the first place.

There are many Americans who might find the allegory relatable. Especially this weekend, just days before our shared national anti-holiday: Tax Day. Once a year, every year, Americans scramble to collect their W-2s and 1099s and an array of other paperwork to complete their state and federal tax returns correctly before April 15.

It’s a daunting task, and there’s simply no reason why doing our duty as citizens should be so complex. Other nations provide pre-populated tax returns that can simply be reviewed and returned, or boast withholding procedures so accurate that citizens need not file at all. Yet for all of the GOP’s recent bluster about allowing Americans to file their taxes on a postcard, federal and state tax payments remain to most of us an alarming mystery.

Recent studies show that the IRS audits low-income and minority filers at disproportionately high levels. Many of the neediest households miss out on tax breaks that they should be receiving (20 percent of those eligible for the earned income tax credit don’t get it, for instance) or purchase tax-related financial products and assistance to avoid filing incorrectly, adding to their financial burdens.

Meanwhile, the wealthier among us (remember: corporations are people, too!) are able to hire tax lawyers, consultants and accountants to clue them in on lightly advertised but heavily lobbied for loopholes that allow them to pay a lower tax rate or even no taxes at all.

And now, as though to make our annual headache even more complicated, two proposals have surfaced that both purport to make this unpleasant day easier.

In reality, only one would.

The House Ways and Means Committee has just passed the absurdly titled “Taxpayer First Act.” The bill, introduced by John Lewis, D-Ga., and Mike Kelly, R-Pa., (for once, bipartisanship!) would prohibit the Internal Revenue Service from developing a free online system that most Americans could use to file their taxes. Similar legislation is likely to soon receive approval in the Senate.

It makes little sense — that Congress would make it more difficult for citizens to file their taxes — until you consider that such a sensible platform would create competition for tax preparation companies such as Intuit (maker of TurboTax) and H&R Block. Those companies have poured more than $6.5 million into lobbying for this bill and other anti-competitive proposals in the last year alone. That may explain why it is moving briskly through Congress.

Going in the opposite direction, Sen. Elizabeth Warren, D-Mass., has reintroduced her Tax Filing Simplification Act, first offered in 2016 and reintroduced again in 2017.

Pointing out that taxpayers spend an average of 11 hours preparing their tax returns and pay $200 each year for tax-preparation services, Warren would prohibit the IRS from entering into agreements that restrict its ability to provide free tax help to the rest of us, and instead would instruct the IRS to create a free, online tax preparation and filing service. The act would also allow taxpayers with simple financial situations to elect to receive a pre-prepared tax return with tax liability or refund amounts already calculated, as happens in many other countries.

Unlike the plan backed by the private tax-prep companies, Warren’s plan is not moving so briskly through Congress, though it has support from some other Democrats in the Senate and House. One might expect this to upset some Americans, but many are likely too busy just trying to figure out how to fill in their own 1040s to notice.

As for my own taxes, I worried that my refund was gone with the wind. But after some time spent pacing up and down the street and squinting into trash cans, I eventually found the check scrunched up and wedged against the curb. It had been run over by a car, I think, judging by the tread marks that ran across it. The rest of you may not be so lucky.

It’s likely that the so-called Taxpayer First Act will become law well before Warren’s plan gains traction, because of Intuit & Company’s spirited lobbying efforts. It’s the classic case: a small group extremely invested in one outcome (continued tax confusion), whose dedicated efforts overwhelm the much larger interest of a more diffuse majority, which might benefit from the opposite. Here, the small group is the tax-prep lobby. The diffuse majority? The rest of us, trying tentatively to calculate our returns.

But I would suggest that this be the year that we finally take note, make an effort to provide outspoken support to common-sense policies and not let our interests be trampled while we aren’t paying attention. Sure, tax season is busy. But it’s our time and money, after all, blowing in the wind.

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